Accounts to be maintained for an online business

Tax queries 460 views 2 replies

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I have recently started a business of Indian handicraft trading. I buy the products from an artisan and sell it to my clients online via facebook. All the payments are credited to my bank account and all the expenses are paid either via NEFT transfers or via cash. Recently I have got few international orders as well.

I wish to know what all accounting records will I have to maintain so that at the year end my bank account can be reconciled with my sales and expenses and the profit can be shown in the IT return? Please let me know the supportings also which I will have to attach with the invoices. Also For the international order, I wish to know that is it compulsory for me to apply for IEC code?

Is there any way by which I can send the products without IEC code because as of now the business has recently started and I am not sure if I will get regular international orders or not, so I feel applying for IEC for two or three orders will result in a lot of paper work for me.

Your expert opinions will help me a lot.

Replies (2)

Mihir

Wealth Manager

5293 Points Posted on 29 July 2013

If you are trading, buying and selling, then you are required to maintain books of accounts because you are liable to pay VAT.

Income from sale is your business income, and expenses incurred to generate this income becomes deductible expenses.

I think you can sell these products in the international market even without IEC. But in order to receive the remittance, you will be required to complete formalities as per the terms of the authorized dealer of the bank. You will have to get a certificate from a chartered accountant to submit to the authorized dealer.