Reseller Certificate: What is a Reseller Certificate? A reseller certificate is a permit which certifies that a retail business will not have to pay sales tax when they purchase goods on a wholesale basis for the sole purpose of reselling them to customers. Reseller certificates are used in the United States as well as a host of other countries. It is known by a variety of names – such as resale certificate, reseller permit, sales tax permit and resale license.
Students can find more about certificates, explore the types used for academic purposes, professional purposes and more.
Does India have the Concept of a Reseller Certificate?
India does not have this provision, instead, there are other specific tax laws which govern such various aspects of business. Following are some of the most common forms of sales tax practiced in India:
- Manufacturer’s Sales Tax – As the name suggests, it is the tax levied on the manufacturer of particular goods
- Retail Sales Tax – Retail tax is levied on the end customer/ consumer
- Wholesale Sales Tax – Wholesale tax is paid by individuals that distribute or sell goods on a wholesale basis
- Value Added Tax – VAT is levied by certain governments on a product whenever value is added at every stage of the supply chain.
- Use Tax – Use tax is levied on consumers of goods who purchase it from vendors that do not fall under the tax jurisdiction.
Reseller Certificate for Selling Online
In India, there are no particular certificates or licenses required for selling online. The rules and regulations are the same as operating a brick and mortar store. However, in case you wish to receive/ accept payments directly to your eCommerce store, you will need to integrate a payment gateway into your website. For doing so, you will need a license – whereby you should register yourself as a business entity (Private ltd, partnership or sole proprietor). This applies for other eCommerce vendor platforms as well – such as Amazon, Flipkart, eBay etc.
Prerequisites for Online Sellers
If you wish to sell online, or through e-commerce platforms, then you will have to provide certain personal and tax-related information. These include:
- Name and contact number
- Business entity type
- Business name
- Business address
- Business category
- PAN Card
- VAT / TIN number
- Bank name and bank account details (account no and IFSC Code)
FAQ’s on Reseller Certificate
Question 1.
What is a reseller certificate?
Answer:
A reseller certificate is essentially a document that permits a business from not having to pay sales tax if they purchase goods on a wholesale basis for the sole purpose of reselling it to customers.
Question 2.
Does a seller in India need a reseller certificate?
Answer:
A reseller certificate is predominantly used in the United States. In India, there is no such equivalent regulation. The seller will have to abide by the tax laws and regulations set by the Government of India.
Question 3.
Is a Reseller permit the same as a reseller certificate?
Answer:
Yes, reseller permit, resale certificate, sales tax permit and resale license are the same as reseller certificate.
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