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Have composition GST number, want to sell Online. What to do?

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I have a shop of electrical goods. I have applied for a composition GST number for this. I am eligible for composition GST number.
Now, I want to sell products online via online market places (Like Flipkart, Amazon, Snapdeal etc) But with composition GST I cannot sell my products online. Composition GST number is necessary as all my competitors have composition GST number (giving 1% tax).
If I go with regular GST, Product price will go up in my shop and I shall be out of market. On the other hand I want to sell my product online. How can I handle it abiding law?

posted Nov 21, 2017 by Navya

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1 Answer

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It is clear that you cannot have a Composition Registration and sell through the online marketplace like Flipkart, Amazon, Snapdeal etc.
For this, there has to be two separate business entities under separate PAN numbers. All business entities under the same PAN would have to jointly apply for Composition Scheme otherwise neither of the business entities would be eligible for Composition Scheme. Therefore, it’s important that both the business entities CANNOT have the same PAN number.
The next question that comes to mind is, whether two business entities can be a proprietary firm. It can be but then the PAN number to be used would be that of the proprietor, which brings us back to the same problem of a common PAN number.
It is therefore important that a separate business entity is created for the online market sale which is completely different from the business entity enjoying Composition Scheme.

There are numerous forms of business entities that can be formed and would depend on the size and exposure you intent to have in the market. Examples are:
1. Another proprietary unit using the PAN of a close relative, like father, brother, wife. But you have to remember that such a unit would also have to file its IT Returns.
2. Partnership with close relatives. In this case, a separate PAN would be allotted to the partnership firm.
3. Of late the One Person Company (OPC) has also become very popular and could be looked at as another option.

answer Nov 22, 2017 by Prachi
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