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[Question] Who pays the export taxes when dropshipping - Me or the Wholesaler ?

Discussion in 'Dropshipping & Wholesale Hookups' started by dreamcoder28, Dec 16, 2012.

  1. dreamcoder28

    dreamcoder28 Regular Member

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    Hi guys,

    I'm starting out in dropshipping business. I'm from India and I have located a wholesaler also from India, he'll dropship the products to my customers in US/UK and I'll be starting an ecommerce store to sell stuff in US and UK

    But one newbie question I have is that when dropshipping the product to US/UK who pays the export tax in India, me or the wholesaler.
    In other words who's the real "Exporter" here.
    My best guess is that since the customers would be buying from my site and it is me who would be invoicing them hence I think I should be the "Exporter" in this case and liable of paying the taxes.

    Any help guys ?

    Thanks :)
     
  2. gigglefit

    gigglefit Newbie

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    That is something for you and your wholesaler to decide. It's important to be able to have it paid for before shipping, as it would be a poor business practice to have US customs hold the items for tax reasons... making your customers pay more money and have a delayed shipment.
     
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  3. dreamcoder28

    dreamcoder28 Regular Member

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    So what's the best way to deal with this, since I don't have the exporter license yet and don't know how things work when exporting from India and getting Import clearance in US, so should I just ask my wholesaler to handle all this and let him be the exporter ?
    But in that case can I still invoice my US customers or the wholesaler will invoice them ?
     
  4. dreamcoder28

    dreamcoder28 Regular Member

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    bump...
     
  5. XHBTR

    XHBTR BANNED BANNED

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    That all depends on what you guys are going to ship, in what quantities and by what means.

    Most countries do not care if you are going to ship single, inexpensive non - prohibited items by regular mail / postal service. Attach a C22 ( i think it is the C22 - small green thing ). If you use a courier like Fedex or DHL a CI must be attached to the shipment, regardless if it's a gift or sample or commercial value.

    As far as the "real" exporter is concerned - that is always the entity who's name is listed as sender of the shipment. What you invoice the customer / buyer has little to do with that.

    Do you need an export license in India for shipping something small with the postal service ?
     
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  6. dreamcoder28

    dreamcoder28 Regular Member

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    Thanks for you reply man

    I'm sorry I didn't get you on "CI", do you mean cost, insurance and freight ?

    I don't think so but I have yet to confirm.

    The product is a type of apparel in the price range of $50-$100. Since the product shipped will be having my site's name in the sender's name, hence should I infer that I'll have to pay the taxes?

    I'm curious to know what other guys are doing whose products are dropshipped by Indian/Chinese wholesalers
     
  7. XHBTR

    XHBTR BANNED BANNED

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    CI = Commercial Invoice

    So you will be shipping mainly a single item. A fairly small parcel /package. If you are going to do that with regular postal service - and you probably will since a courier would cost you something in the USD 40-50 range for a 1kg or less shipment from India ( any Asian Country as well ) - you will not have to worry about the export part unless you got some really funky rules in India. Check on that with someone who knows.

    Now, you can't pay for any taxes / duties that may me charged at the destination. That must be done by whoever will receive the goods. But again, it's a single item with low value so most likely it will not be taxed at all.

    When i was still shipping from here ( Manila, Philippines ) directly to the US /AU /UK/ Germany/Sweden and other places it was almost always a direct delivery to the customer without any taxes to be paid. Germany was an exception - in many cases the shipment ended up at customs and the buyer had to go and pick it up - real pain in the butt for the buyer.
    US was the easiest , never had any kind of trouble. I did, however mark everything as gift or sample without value or with very low value. Most Countries have a certain amount that is under the taxable amount - Germany is i think 40 euro - not sure anymore about US.

    Hope that will help you out
     
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