Hello Everyone,
After long time I have come out of hibernation. I have started up again. Right now I am on a pilot stage and I am stuck and seek your advice.
MonkBro is a platform which have vendors selling their products like any other marketplace. Our delivery partner Delhivery, picks up products from vendors and deliver it to customers. The invoice is generated in the vendor’s name but the moneys lands into our bank account first. We deduct our commission and handover the money to the vendors.
So I am basically providing a service of managing sales and payment collection. So ideally I should be liable to pay service tax on the commission I earned.
But most of the CAs I met told me that it is not possible. If money for a product lands into my account first then I will have to pay VAT on total amount.
But our delivery partner Delhivery is also doing the same thing. Delhivery delivers the product, collects payment which lands into their bank account and later transfer the amount to us. And they pay only service tax on the commission they earned.
Let me know if anyone can help me out with this issue or refer me to someone who can help.
Regards,
Aman A Jha
9892621090
aman4apex@gmail.com
Twitter – @GariboKaTATA
Ravdeep Singh
Hi Aman, as per the best of my knowledge you are required to pay only service tax only on the commission which you have taken, VAT or CST is to be given by sellers on the product selling rate. Please note that it will be on the selling rate neither on the amount that you will be transferring in their accounts. and also send service tax invoice to the sellers.
Cheers !!
Amit Shroff
Aman, forget for anything else even the payment gateways like PayU, PayTM everyone is doing the same. Since you are just charging the commission for using your platform, where the invoice etc everything is in seller’s name.
The problem is most of the CA themselves don’t have any understanding of this business model, hence you need a really good CA to handle your account.
Regards,
Amit