Merchant trading through Ebay marketplace.

[Bipul Goyal]

Sir , we are selling ritual items on ebay internationally. We do not import or export directly. After receiving order we are directly asking our Nepal supplier to send item to client at USA. And money comes to my account in India through PayPal.

Order comes in small scale. So Nepal supplier makes a small parcel and sends to my client through post office.

So what should I do after GST ?

[KASTURI SETHI]

In this situation three stages are involved.

1. You place the purchase order on Nepal supplier. This is export of service from taxable territory.

2. Nepal dealer supplies the goods to a person in USA. This activity is from non-taxable territory to non-taxable territory. Hence no question of GST.

3. Now you receive the amount of profit or commission in the form of foreign exchange. This amount has been received by you on account of export of service (though you have not complied with export procedure) as well as activities happened in non-taxable territories. Services have been enjoyed in a foreign country because of your export of service of placing order on Nepal dealer.

It cannot be denied or challenged.So your profit or commission, whatever you may call, is the result of export of service.

Hence not taxable. Placing the purchase order on a person located outside India is export of service and nobody can challenge it. As a result, foreign currency has been received. Both conditions fulfilled for export purpose or criteria.

[Bipul Goyal]

Namaste sir

thanks for your help. How will I show it in GST return

[KASTURI SETHI]

That is possible after looking into terms and conditions of contract, if any.

[Bipul Goyal]

Thanks for your message sir.
There is no agreement between me and supplier in Nepal. Actually there is 2 or 3 supplier from whom I purchase.

It’s a small scale shipment.
I get orders in Ebay from Usa. Each order is in between 10 usd to 40 usd.
After that I ask my Nepal supplier to pack that item and send it through post office ( registered mail from Nepal )

All the payments I receive in India through PayPal.
PayPal convert that money into Indian currency and transfer it to my bank account.

[Chhatra Jain]

I endorse the views of Shri Kasturiji who explained the matter in a lucid manner.

[KASTURI SETHI]

Thank you Jain Sahib.

[KASTURI SETHI]

Dear Querist, You can show this transaction value against the column "Exempt. Etc." in GDTR returns.

[Bipul Goyal]

Namaste sir.

According to new rule for small exporters where letter of undertaking needed to be furnished instead of bond how to show it in merchant trading while filling GST return ?

[KASTURI SETHI]

Filing letter of undertaking makes no difference. Exported goods are zero rated. You can show in Column 8 A 8 B etc.

[KASTURI SETHI]

There is a difference between zero rated and NIL. Exempted goods also carry separate category for the purpose of accountal and filling in GSTR returns. One has to be careful.

[KASTURI SETHI]

Against export you are eligible for ITC and against NIL and exempted you are not eligible for ITC. You have not followed export procedure. This is the difference.

[Bipul Goyal]

Thank you sir. What will be better to do ? Can you please suggest me a good CA. you can fill up GST return.

[KASTURI SETHI]

I do not prepare returns. You may contact expert CA in your city.

[Bipul Goyal]

Namaste sir.

after gst council meeting. Do you thing there will be any changes for me ?

[KASTURI SETHI]

Wait for notifications.

[KASTURI SETHI]

Dear Goyal Ji,

It appears to me you are not trusting in experts because it is a free lunch. People consider only those doctors reliable and best who charge heavy fee. This is the way of the world.

[Bipul Goyal]

Nanaste sir

thats not true sir. I trust. All the advices are very important for me. You helped me a lot sir. 🙏🙏🙏

just I need to come to final conclusion. Because I talked to many CA. nobody is 100 percent clear what to do. So I loosing my business

[YAGAY and SUN]

FIEO & PayPal sign MoU to empower small & medium businesses to sell across the globe in a seamless and safe manner

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https://www.fieo.org/view_Press_Releases_detail.php?lang=0&id=0,21&dcd=4723&did=152292603538essvm5bfq8ocs8qr54rd5en1

[YAGAY and SUN]

We do understand that this transaction is looking like merchant trading out side the India and on such transactions no GST is applicable.

AI Summary

Export of service: merchant receipts for arranging overseas supply are treated as export and qualify for zero rating under GST.
A merchant who instructs a foreign supplier to ship goods directly to overseas buyers and receives payment into India is treated as exporting a service by placing the order; the cross-border goods movement is outside the taxable territory and no GST arises on that supply. Receipts to the Indian merchant are consideration for the export of service and should be reported under export/zero rated heads in GST returns; entitlement to input tax credit depends on following export procedural requirements and using appropriate export documentation such as bond or letter of undertaking.