Hello
I have been an avid reader of Rodinhoods and this is the first time need your help.
I have recently started a fashion eCommerce website focusing mainly on women clothing.
I get stuff at wholesale rates and then retail the same on website. Now the problem is I have not yet registered my business and am doing it as an individual. Have partnered with ShipRocket for shipping needs.
Can someone please help me out with issues like what taxes to pay and different shipping forms (road permit etc) needed for shipping. Like you need form 39 for shipping to UP. How do I get these done as am an individual.
Kindly help me out.
Darshan Bhambiru
It would be better to sit with your CA, Legal Advisor and discuss in full detail.
It will help you a lot, who can guide you, because when you are selling something on your portal means, you have to pay tax to the Government (now the ecom business would also come under the Consumer Protection Act, latest news update) and it depends on the category of ecommerce, its like only dress or books or ecommerce portal like flipkart, snapdeal, jabong and many others where you can sell anything.. so depending upon the item you sell, you have to pay different tax to the gov according to the item.
Since you would also need to file returns and other related work too also for the various billing and Logistic requirements you would need to setup a company which could be of any form starting with the Sole Proprietor to the latest OPC (One PERSON Company)
You can use the Search button Top Right above for finding with ref to any of your interest’s keywords, for more info already shared here on trhs
Cheers!!!
NIkul Sharma
You can make sales upto 5Lakh without a TIN Number but that also means the sales can only happen within the same state. For inter state Sales you shall require a TIN Number. As far as the Forms go, FORM 50, FORM 403 are required for MP & Gujarat. Kerala is also on the list. Worst clearance usually happens in West Bengal where I had issues of entry Tax being levied to the customer for goods prices less than Rs. 1000. All the instanced happened when the Deliveries where to happen to individuals but addresses where of Pvt Ltd Firms.
Earlier only Inter State good movement with 2% CST bills where questioned but ever since E commerce sales have grown, VAT Paid Bills of goods entering the State have also come under the scanner of local Sale Tax Authorities of almost all states. As per a report even Punjab is contemplating to start some kind of Form for VAT paid deliveries.
Having said that your courier partner is the right source connect for knowing FORM related queries. Almost all of them are available online and generally need self attestation along with TIN Number. Again since all FORMS require you to mention a valid TIN Number it is necessary to have one for Inter State Sales.
Kamal Kalra
Hi Khalid,
First things first, for any business to happen online, you need to be a registered entity.
Kartrocket / Shiprocket can just take you a little far, but to go beyond you will have to have TIN no.
So, there are two Tax Slabs for women wear : 5.25% VAT for Accessories and Apparel and 12.5% VAT for Footwear and Handbag.
Footwear also has an excise of around 10% if you are a manufacturer too.
Other than that , State Laws come in to play when you are moving your goods from one state to another. Mostly the forms and all are taken care of Logistic partners, but you should know what kind of taxes are being billed so that you can add them to your costs.
So, if you are selling within the state , their’s a certain limit upto which you don’t have to pay VAT, but after that you will have to pay it. For most states it’s upto 10lac a year , for Delhi I think it’s 20 Lac not sure.
Also, If you are selling interstate ( like in Ecommerce ) you should have TIN number.
In a nutshell, if it’s just pop shop kind of a thing, you can continue, but if it’s a long term business strategy, then you should sit down with a CA / Finance guy and close all your doubts regarding taxation cos, taxation is a big chunk in India. Sometimes, your entire margin / business strategy can change due to tax laws.
My 2 cents.
Anoop Nair
Hi Khalid
Tanz from Zepo nailed it here. Hope that helps.
Anoop Nair (Co-Founder | The South Indian Store, Selling South Indian Snacks online )
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Khalid Khan
Hey all
Thankx for your suggestions.
But am still not sure about shipping forms.
Eg: Some of my packages via FedEx were returned from UP because Form 38/39 was not attached. Although value of the packages were below 5000. Now form 39 is to be filled by consignee who will get it signed by sales dept etc etc. Who’s going to get all this done?
Thanks & Regards
Khalid Khan
Hey all
Can someone plz help me put with shipping forms.
I know that Form 39 is required for shipping to UP. But that has to be filled by consignee and get it signed from Sales Tax dept.
Now why would some buyer get into all these issues. Any other way to get Form 39.
Facing similar case with West Bengal where consignee has to pay entry tax and generate waybill.
Can someone plz let me know how are other eCommerce companies shipping to UP, WB etc
Thanks & Regards
Darshan Bhambiru
Did you really Read any of the Comments or the links provided therein too ?
DO It!!! (Again, if done)
Khalid Khan
Have read all the comments and links provided. Basicially I need help regarding shipping forms. What I am selling is exempted from VAT. Now the real problem comes with inter-state shipping to states like UP, WB etc
Eg: UP needs Form 39 mandatory for all packages (earlier it wasn’t required for packages < Rs. 5000). Real problem is this form is to be filled by consignee and get it stamped from sales tax office and then the consignee will send that form to me to be attached with package.
Same is the case with WB where consignee will fill the form, deposit 1% entry tax in local bank and then send the form to me.
Just asking how are other ecom companies getting all this done, as they never ask buyer to fill any form etc.
Darshan Bhambiru
Khalid, It is Obvious you are not a CA or anywhere nearly related to the Field too Read my First Line again!!! Contact someone in that Domain in your known circle for ease, or we also have a few here on TRH you can connect with them as well.
Some things would definitely get easier as a Company, than as an Individual as I said earlier it all depends on your Choice. This is not related to Ecom Companies but the Process they have Established over Time, to get around this essential Delivery Requirement for their Customers, their Logistics Partners/Departments get these done surely as you pointed out.
I am Guessing, as you say it is not possible to Deliver without them being completed too 🙂
You might need to setup an associated Courier Collection/Pickup, Drop Service or connect with an existing one for this probably, for the Documentation of the Bookings are not done at your Office, or are done on the Phone or Online for Logistics if you are shy of using Technology in todays Well connected Times. Adding Cost to the Customer. As a Think Aloud Possibility.
Similarly, if possible You can also try to get some Warehouses in the respective states setup in liaison so you can store your wares to supply from there or i n neighboring states since some states do not have Outgoing forms so you can redirect those wares from those outlets / warehouses.
This is very nicely already detailed here in this post as already pointed out by Anoop Nair, posted by Tanya of Zepo. With the End Notes mentioning how it can be achieved, Do Read Again.
Mystery Behind Shipping Forms in India: Busted!
“From this table, find the State to which you are shipping your products. Cross check the conditions to know what form is required. Download the form and fill it.
You will need to provide the filled forms to the person arriving for the pick up. The logistic company will produce this form for you at the checkpoints. Rest assured, as your products travel safe to reach your customers at far off places.”
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Let me Help you with a few more how Others known in the same Domain do it, with some Templates, List of the various forms handy, maybe download and make a folder for all them so you can pull it out whenever required to refer as well better still so you can make your own too while booking when They do it why not You?
Get these completed in Triplicate and other information detailed in the First Link below for almost all states with the procedure:
STATE WISE PERMITS & FORMS REQUIRED FOR INBOUND SHIPMENT – Hardwarebajaar Blog
You can put this Disclaimer as well to start with when Booking, Either on the Wall behind the booking counter or as a Standalone Laminated Sheet placed for the Customer to read before booking too, or on your Website, Page, Blog etc which you can refer anytime in need :
Delivery to certain states without proper forms from the consignee. This applies to all shipments that goes by surface (road) transport. In such cases, we would require the below mentioned forms from the customer, signed or authorized from the local sales tax office. You may also require the NOC from the sale tax office for few states.
Disclaimer:
State VAT Rules & Regulations are subject to change from time to time. Consignees are, therefore, advised to seek independent verification before tendering any order. (Your Company) disclaims all responsibility and accepts no liability for the consequences of any person acting or refraining from acting on the information given in this Guide.
The Consignee should furnish such information and documents to (Your Company) as may be necessary to comply with the requirements of the local laws of the States through which the consignment is likely to pass en route to destination. (Your Company) is under no obligation to enquire into the correctness or sufficiency of such information or documents.
Regulatory paperwork is based on the Rules and Regulations of the State concerned.
Practice could be different than the Rules & Regulations in some of the States.
Once you get your Process in place, then it would not be an Issue.
Specifics for your mentioned two states are below others are available for Download as PDF files it may also depend on which Freight service you use so check with them as well respectively and maintain a File which you can refer to as a Cheat Sheet.
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UTTAR PRADESH
Form 38 is mandatory for all commercial shipments traveling to Uttar Pradesh
Form 39 is mandatory for all personal/non commercial shipments traveling to Uttar Pradesh.
Inbound Shipments
Commercial shipments to Uttar Pradesh require to be accompanied by Form 38, Along with Form 38 a commercial invoice filled with all details is a must. The Form should bear stamp and signature of the shipper, consignee and the sales tax authority of Uttar Pradesh.
Non-commercial shipments addressed to individuals, Govt. Agencies and unregistered dealers require to be accompanied with Form 39.
Forms 38 AND FORM 39 are in 3 parts marked original, duplicate, triplicate. Original part is retained by Sales Tax department of check post at the time of entry and the duplicate delivered to consignee along with the shipment.
Form 38 and 39 are issued by UP sales tax authority. Form 39 is valid for one month only. Validity of Form 39 is mentioned on the form.
These forms are obtained by the consignee signed & stamped and the triplicate copy is retained by the consignee and the original and duplicate are sent to the consignor by consignee. The original and duplicate copies of these forms as applicable should be signed and stamped by consignor, consignee and sales department of UP.
Note: Form 38 and 39 without signature and stamp of Sales tax department of UP is not valid. It should be properly filled with stamp and signature of consignor & consignee.
Collect original & duplicate of these forms as applicable from the consignor at the time of pickup.
Check whether the forms bear the signature of the consignor & consignee and are properly filled.
If the sales officer finds the goods are undervalued then a penalty of up to 40% on the assessed value is levied.
The consignee either pays the penalty for clearing the shipment or has to prove to the sales tax officer the correctness of invoice value to get the penalty waived.
Outbound Shipments
There is no Form required for shipments TRAVELLING FROM / OUT OF Uttar Pradesh.
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WEST BENGAL
Outbound Shipments
All commercial shipments traveling out of West Bengal require VAT Form 51 to be accompanied with the shipment.
Inbound Shipments
There is a major change in West Bengal Sales Tax Process. Earlier Form 50 has been replaced by Electronic Form 50A.
Under new Sales Tax Law importing Registered dealer (Consignee) can generate on line (Through Internet) Way Bill (Permit) consisting of PART-1 and PART-2.
Surface Shipments
Shipments are to be provided with both Parts. PART II can be generated by the Customer with/without vehicle no.
Transporter/Courier Company can write down Vehicle no in PART II before entering the shipments into
West Bengal. For direct Vehicle, Origin point must ensure that the Vehicle No is entered into PART II.
Air Shipments
Air shipments have to travel with both PART PART II & I. Air shipment cannot travel with PART 1 only.
Hence shipments which are to be connected through the AIR must travel/connected with PART I AND PART II WITHOUT FAIL.
Rail Shipments : Rail Shipments (DSP) also requires traveling with two parts. In PART II AWB Number and destination
Railway Station Name is to be mentioned.
Octroi is not applicable to shipments for West Bengal.
Entry Tax is not applicable to Shipments for West Bengal.
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Files available as PDF for downloading :
State wise Regulatory information – Blue Dart Covers all States, Listed Commercial Shipments for Registered & non Registered Dealers E-COM & Personal Shipments, Clickable Content for quick reference inside the file.
Uttar Pradesh Form 31/38 is mandatory for all commercial Shipments Specific to Uttar Pradesh
Inbound Sales Tax form Permit to be handed over Similar to BlueDart DHL
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