Taxes involve in selling NGO products

[Ashish Chadha]

Hi,

I have 02 questions related to the services which our organization is providing to NGOs as social service.

1. We are selling the products which are manufactured by registered NGOs through our organization website (based in Delhi). Please let us know what all taxes will be applicable to our organization as we are not making any profits on any of the product (VAT, Service Tax, etc.)
2. We are also taking online donations on behalf of NGO and forwarding the complete amount to their accounts. Do we have the authority to do the same, if yes then should we deduct any amount as taxes from the donated amount before transferring the same to NGOs account? .

I will wait for your reply.

Thanks & Regards

Ashish

AI Summary

VAT and CST liability may arise for e commerce intermediaries selling NGO products, with service tax and income implications.
Operating as an e commerce platform that receives orders, effects sales and collects payments exposes the intermediary to indirect tax obligations: commissions are subject to service tax, and where the intermediary receives goods and effects sales on behalf of suppliers it may be treated as an authorised agent, attracting VAT or CST regardless of the suppliers' VAT/CST registration. Collection and forwarding of donations by an entity that is not a recognised charitable institution can constitute a taxable service unless the activity qualifies as a pure agent or the collector benefits from a charitable exemption; temporary funds may yield taxable income such as bank interest.