Tax implication on selling t-shirts out of India?

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Tanul (Querist)
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30 June 2011 One of my clients has newly started business of selling t-shirts online.

His supplier is supplying him with printed t-shirts that he sells to customers.

I wanted to know that when he sells t-shirt outside of India, what would be the whole process of doing so and what would be the tax implications?

I have come to know that since it is export, it would not be taxable and I can even claim refund of the tax paid on purchase of those t-shirts that I am exporting.

Please guide.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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30 June 2011 RBI says that banks offering such facilities by entering into arrangements with OPGSP abroad must open a Nostro collection account for receipt of export-related payment. They must ensure that all receipts are automatically swept and pooled into the Nostro account and repatriated to India and credited to the respective exporters account with a bank in India immediately on receipt of the confirmation of the transaction from the buyer and, in any case, not later than seven days from the date of credit to the Nostro collection account. The onus of doing a due diligence of the OPGSP and verification of the bonafides of the transactions has been placed on the banks. The Nostro collection accounts can be debited only to repatriate the export proceeds to India for credit to the exporters account or for payment of agreed fee/commission to the OPGSP under the sale contract.

in violation of Indian laws and, therefore, decided to not only restrict such facility to transactions for $500 or less but also to ordain greater disciplines.

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