We have just launched an e-commerce website and we have been told that we need to get the sales tax registration done.
It is under a proprietorship firm and not a Pvt Ltd company.
We were told that we need to charge VAT registration done. We got that done from the Delhi Sales Tax office and got the authoirty to charge VAT on every transaction @12.5%
Got to know later that we don’t need to charge the VAT right from the first transaction itself..There is indeed a threshold limit of Rs. 10lakhs after which the Sales tax becomes mandatory. So I could have waited for the Sales tax registeration.
Now my problem is–
On every Rs. 1000/- product the customer has to pay a tax of Rs125/- ( the VAT charges are 12.5%)
So the total price which is paid by the customer for the product on the website becomes expensive if the sales tax of 12.5% is included. (Like for Rs.1000 product, he is paying 1125)
What do you suggest.. Should I get the Sales tax cancelled as I will take about 1-1.5years to reach the threshold limit of Rs. 10lakhs ?
Please advice.
Thanks so much