Hi All
First a Small Background
I, Durgesh Khandelwal, Run a Startup Event Marketing Company Team ADit. An Event Marketing Company, in Pune.Off Late have been running a Weekend Flea Market for Small Home Based Entrepreneur’s in Pune, since Aug Last Year, check out our FB Page here
I have been a Fellow Rodinhooder since the Days when the only Post here belonged to Sir Alok Kejriwal.
Have absorbed so much , that I am thrice as Wiser as I was a Year Back ;-)…..just kidding
I went all the way from Pune to Mumbai coz Like many others I too felt offended by Alok’s ‘ Middlemen ‘ Post on Facebook. (Old Rodinhodder’s would remember that…. dont have a link of that too) lots of things have evolved since then at the RODINHOODS.com and the The Rodinhood MIxer’s. ( I’ll have a seperate post on the year gone by with The Rodinhoods Later)
I have a small BIG problem which I wanted to Share and have more Wiser Men Solve this for me.
As I mentioned Earlier that I run a Flea Market in Pune. At My Flea Market I have Small home based Entrepreneurs set up stalls at the Flea Market. These Stalls range from Merchandise which includes Apparels, Jewellery ,Accessories , Watches,Tshirts, Pottery , etc etc etc. on various stalls that vary every weekend.
To make better sales and increase the conversion and to Add more value to my Flea Market I offer them a Credit Card Machine Facility which is connected to my Firms Current Account, I simple words
I take payments from their Customers on behalf of my Stall Owners and at End of The Day make Payments to them thru Cheques.
Though I have started this a few Weeks Back, My CA has Advised me Strictly not to do that as I may get Into Tax Liabilities which may lead to trouble..
So Im Seeking a Solution to this Problem as How can I start taking Credit Card Payments on My account just like I see CC AVENUES or any other payment Gateways doing it online for N number of e commerce Website, where they charge a Transaction fee or Plan Fee depending upon the No of Transactions
Is there a Way I can give them this Facility without getting into Service Tax and other Tax Liabilities.
Seeking solution for the same
Regards
Durgesh Khandelwal
I could be reached on 9890880681
durgesh@teamADit.in
Ankit Sawant
Hey Durgesh,
Even I have a similar situation wherein I will be accepting payments on behalf of my clients and disbursing the amount after taking a percentage for the service provided. Please do let me know if you find a solution for the same.
Regards,
Ankit Sawant
ankitsawant@ymail.com
9920212160
Aditya Babbar
Durgesh
Being from the Payment Space, unfortunately, there is no simple way of doing what you are trying to do. Even though your intention would be noble, the Banks scorn upon something like this.
The only simple way to do this, is if you can structure it in such a manner, that this Weekend Flea Market is an entity and it becomes a Reseller for each of these entrepreneurs. That way, whatever you get charged as TDR(by the Bank) PLUS your margin could be termed as a Reseller Fees.
You could have this vetted from a CA.
– Aditya
Ankit Sawant
Hey Aditya,
I am going to start a pilot electronic buyback program in Mumbai and will be providing only online sales assistance. i.e. will help people sell their used electronics online as that always fetches a better price, accept payments on their behalf and later disbursement the same after deducting a commission. Can the suggestion given by you work for me as well?
Regards,
Ankit Sawant
9920212160
Project Bazinga!
Aditya Babbar
From what I can gather, you are providing a platform for customers to sell their electronic goods (Customer to Customer), much like QUIKR and the likes, and you would be charging them a fee for the usage and the transaction ?
Ankit Sawant
Hey Aditya,
Yes you are right but unlike Quikr & olx, we will take care of the product quality verification, provide a minimum warranty on the handset (if out of warranty), take care of the shipping and carry on the online transaction for them saving an users precious time.
The fees that will be charged would be on the final selling price of the product i.e. a percentage of a fixed price post payment gateway and allied charges which will be mentioned to the user prior to he agreeing for the selling the phone via us.
Regards,
Ankit Sawant
Pawan Deokule
Aditya,
This would not be correct. Some of the participants may be registered under VAT and some may not.
Hence a reseller model would not work for an event manager collecting money on their behalf as VAT is not deducted and only added. Hence this model of cash collection would not work in his case.
Pawan Deokule
Durgesh,
Collecting money on your client’s behalf depends on the volume of cash transactions. Large scale firms use an escrow account where a bank becomes the custodian of the money until the correct beneficiary is decided.
For an event an escrow account may not be feasible, hence the best method would be to distribute coupons against cash and have people use the coupons to spend the money. At the end of the day the participants redeem the coupons from you and the entire days transactions can be closed in cash at the end of the day as one single transaction.
This process can be run for card transactions as well. Ideally you can break these into two or three transactions if you cross any prescribed limits of tax.
All the best!