if I grow vegetables in Village and sell it via company/startup... You can assume like do zepto have to bear Tax on selling vegetables to customers online ? What I know is that farming is tax free but pls can you tell me about that angle
Whether Zepto would be liable for tax on selling vegetables grown in a village online depends on several factors, including: 1. Zepto's role:
Direct purchase from farmer: If Zepto directly purchases vegetables from the farmer at their village and then resells them online, Zepto will be acting as a trader and will be subject to Goods and Service Tax (GST) on the purchase and sale of the vegetables. The applicable GST rate for fresh vegetables is currently 0%.
Platform facilitator: If Zepto acts as a platform connecting farmers with online buyers, facilitating the transactions but not directly buying or selling the vegetables, they may not be liable for GST. However, they might need to collect and deposit GST (on 0% rate) if their turnover exceeds the ₹20 lakhs threshold.
2. Farmer's registration:
Registered Farmer: If the farmer growing the vegetables is registered under the GST regime, they are liable to pay GST on the sale to Zepto (again, at 0% rate). However, if they are exempt from GST registration due to their annual turnover being below the threshold, they wouldn't have to pay GST.
Unregistered Farmer: If the farmer is not registered under GST, Zepto might need to pay GST on the purchase from them at the rate of 5% under Reverse Charge Mechanism (RCM).
3. Place of supply:
Intra-state (within same state): If the vegetables are sourced and sold within the same state, the applicable GST rate will be 0%, regardless of whether the farmer is registered or not.
Inter-state (across different states): If the vegetables are sourced from one state and sold in another, the Integrated GST (IGST) rate of 0% will apply.
Additional points to consider:
Zepto needs to comply with record-keeping and reporting requirements related to GST.
The specific tax implications can vary depending on the state of operation and the farmer's registration status. It's recommended for Zepto to consult with a tax advisor for comprehensive guidance.
While farming income itself is often exempt from tax, Zepto's role and the farmer's registration status play a crucial role in determining whether they are liable for GST on selling vegetables online. The applicable GST rate is typically 0% for fresh vegetables, but other factors mentioned above need to be considered for accurate assessment. Consulting a tax advisor for tailored advice is advisable.
I hope this information clarifies the tax considerations for Zepto's scenario.