Each country and state has different laws, so knowing which one applies to you is crucial. Keeping up to date on e-commerce laws is essential to protect yourself and your business. For more information, contact Vakilsearch.
Introduction
E-commerce has grown into our lives in a way we couldn’t have imagined ten years ago. From electronics to food to daily groceries, everything is sold online through e-commerce platforms. The pandemic changed the dynamic between these e-commerce platforms and consumers from luxury to dependency. And now, it has become routine and the most common way to shop, especially in urban areas, due to the apparent advantages of convenience and wider choices.
But that is just a consumer’s perspective. The success of e-commerce platforms cannot be attributed solely to demand. Even the suppliers find it convenient to sell their goods through these platforms. The advantages for a seller are far more than they are for a consumer. First and foremost, they are not required to maintain a physical shop or an outlet leading to savings in rent, maintenance, staffing etc. They are also exposed to a much broader demographic across geographical boundaries. So many sellers are eager to jump onto the bandwagon and sell their goods online.
But to register as a seller on these platforms, there are some basic requirements that a business should meet. This article will guide you through registering as a seller at Flipkart.
Signing Up
To become a seller on these portals, you must complete the sign-up process first. The process is most basic. Most platforms maintain a separate portal for the sellers, and the sign-up process can be completed on the portal itself. The first requirement is to enter the details about the business and the products it proposes to sell.
Who Can Apply?
For a business or an individual to be eligible to sell goods on these portals, the seller registration process is mandatory. They should have one product to offer to meet the minimum requirements. The following can apply for Flipkart seller registration:
- Individual
- Company
- Limited Liability Partnership
- Partnership Firm
- Sole Proprietorship or
- Any other business organization registered under any other Act or legislation.
Registration Process
The applicant must follow the below steps to be registered as a Flipkart seller:
Get The Business Registered
The process’s first step is to register the business as a legal entity. The government acknowledges the legitimacy of a business in the form of a certificate or a code number. For instance, a company has a certificate of incorporation and a Company Identification Number or CIN. The same is for an LLP which also has an LLP agreement. Normal partnerships also can be registered. Sole proprietors and HUFs usually have a trade license or a Shops and Establishments certificate.
Open A Bank Account
Next, the business owner must open an official bank account. Usually, this is covered under the registration process itself. The account has to be a current account and not a savings account.
Get The Business Registered For GST
Thirdly, the business owner must get the business registered for GST. E-commerce platforms insist on a tax number even if you, a business, are exempt from registering because it adds credibility and accountability. This, of course, adds the additional effort to file returns. But the advantages of selling on e-commerce platforms are far more than the drawbacks.
List Of Details Required For Registration:
- Name of the seller
- Contact address of the seller
- Email ID
- Business address
- Pickup Address
- A product category that the seller is planning to sell through Flipkart
- GST Registration and other tax registration documents
- Business registration details such as Certificate of Incorporation, Memorandum of Association, etc.
Other than the details mentioned above, one must submit other documents based on the registered business type.
Private Limited Company
Registering a business as a Pvt ltd Company comes with huge benefits like Limited Liability Protection for promoters, ease of transferability, separate legal entity, opportunity to involve partners or take investors and scale-up operations quickly.
Proof of Identity:
- Photocopy of registered documents and Incorporation certificate of the Private Limited Company
- MoA copy
- Company PAN card
- Proof of Address:
- Phone bill
- Electricity bill
- Rental or Lease Agreement
LLP Or Partnership Firm:
Limited Liability Partnership is India’s new and most recent form of business formation.
Proof of Identity:
- LLP or Partnership Registration certificate
- Power of Attorney duly authorized by a designated partner or employee in case of Limited Liability Partnership for doing a business transaction on its behalf
- Partnership deed
- LLP PAN Card
- Documents identifying as Partners
- Proof of Address:
- LLP’s Electricity Bill
- LLP’s Telephone Bill
- Rental or Lease Agreement
- Electricity bill in the name of Partner’s or LLP
Sole Proprietorship:
If any individual still wants to start a business and register as a seller, he can register as a sole proprietor and start selling online. But, it is not a much-recommended type of business form. Also, it cannot be scaled and has restricted access to bank loans.
Proof of Identity:
- Passport of the proprietor
- PAN Card of the proprietor
- Voter ID/Driving License
- Other government ID cards with photo
- Proof of Address:
- Utility Bill (Electricity bill or Telephone Bill)
- Bank account statement of the proprietor
- License or Lease Agreement
TDS On E-Commerce Transactions
The 2020 budget introduced section 194O to the Income Tax Act. The provisions of this act require an e-commerce platform to deduct TDS on a sale made on the platform even though the e-commerce platforms are not the seller but a mere facilitator.
This is because most of the businesses signing up for these platforms are small businesses that wait to file income tax returns regularly. The e-commerce platforms are made accountable for ensuring that the tax on the income is collected and deposited with the government, hence reducing instances of tax evasion. Of course, if the seller falls below the taxable limit at the end of the year, they can apply for a refund, as is the case with all other TDS provisions.
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Conclusion
The way we do business changes drastically now and then. This keeps the government on its toes to ensure that the principle of owing taxes for doing business within the borders of a sovereign state is not evaded. So the government has no choice but to keep changing the tax structure in the spirit of adaptability. But for a business person to keep up with these changes whilst focusing on the growth and profitability of the business can become a tedious job. Hence it is always advisable to consult with a legal expert with hands-on experience and knowledge about starting a business. If you have any further queries about starting a business or need assistance with any registration, contact our team of experts today so that they can better understand your requirements and guide you through the regulatory process.
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