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GST on International dropshipping

ajay (executive/administrative) (125 Points)

01 February 2023

Hi, If we sale goods directly from china to USA, without importing goods in india , will we require to pay gst on such case?

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11 Replies

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 01 February 2023

Https://taxadda.com/gst-on-dropshipping-business/#:~:text=GST%20on%20Dropshipping%20business%20when%20goods%20are%20purchase%20from%20outside,SGST%20or%20IGST%20as%20applicable.

4 Like

daksham raj (38 Points)
Replied 04 February 2023

No need to pay gst

3 Like

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 04 February 2023

GST will be applicable.

2 Like

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 04 February 2023

GST is not applicable in this case by any imagination whatsoever.

1 Like

ajay (executive/administrative) (125 Points)
Replied 05 February 2023

How GST will be applicable can you elaborate Rashmi madam?

2 Like

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 05 February 2023

As you have made supply of goods to USA , gst will be applicable. However you can claim refund later on.

If you have LUT, the you can sale goods without GST.

3 Like

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 05 February 2023

The supply will be classified under high sea sales and not taxable. Both the legs of the concerned transaction are neither falling under the definition of import or export

4 Like

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 05 February 2023

Agreed with CA Altamush Zafar after reading all laws what I sum up is

In international dropshipping cases, GST will not be levied. According to para 7 of the Schedule III of the CGST Act[1], any supply/transaction that takes place in the non-taxable location with no connection to the home country shall not be treated under the GST regime. If the merchant belongs to India and completes the entire business transaction outside the nation then in such case the GST will not be applied.

2 Like

ajay (executive/administrative) (125 Points)
Replied 05 February 2023

CA Rashmi Gandhi
CA Altamush Zafar

Thanks for valuable insights.

4 Like

CA Rashmi Gandhi (Chartered Accountant) (86285 Points)
Replied 05 February 2023

Welcome 🤗🤗

3 Like

Nilesh Bhate (2 Points)
Replied 16 August 2023

I have a related question, In order to conduct international dropshipping busibess there are many expenses are incurred in India from where entrepreneur is operatiing expenses like Google Ads, Facebook Ads, PayPal fees, Shopify fees & many more such expenses on all these expenses GST is levied by these vendors - Can entrepreneur claim refund of this GST levied to him ?