Dropshipping has become one of the most attractive options for starting an online business in India. With no need to maintain stock or manage a warehouse, anyone can set up an e-commerce store and sell products directly to customers.
However, before diving into this business model, the foremost question every entrepreneur asks is, “Is dropshipping legal in India?” The answer is yes. Yet the model is that strict compliance with tax, business, and consumer laws is essential for sustainable growth and peace of mind.
If you’re serious about the dropshipping business and make it your long-term goal, it is essential to be aware of the legal risks and compliance in dropshipping, as well as the taxes, certifications, and consumer laws.
This blog will serve as an informational guide, rather than a legal advisor. Follow this guide to understand the legal requirements thoroughly and consider seeking a professional legal opinion before starting your own dropshipping business.
Key Takeaways:
- Dropshipping is legal in India as long as all relevant rules, taxes, business, and consumer protection laws are followed.
- GST registration is mandatory for most, and early compliance makes way for an easy onboarding process in the marketplace.
- Detailed business proofs and documentation ensure higher trust, supplier reliability, and easier expansion.
- Every transaction, tax return, license, and supplier contract should be clear, documented, and accurate.
- Avoid taking shortcuts, which may lead to legal complications, penalties, or marketplace bans.
What is Dropshipping?
Dropshipping is a method of selling products online that involves selling products without maintaining any inventory. When a customer buys something from your online store, you simply pass the order to a supplier. The supplier then packs and ships the product directly to your customer.
This means you don’t have to buy products in advance or worry about storing and shipping them. Your primary responsibilities include managing your online store, promoting your products, and providing customer support.
Dropshipping reduces startup costs and enables the quick establishment of an online business. However, to succeed, you need to choose reliable suppliers and communicate effectively with your customers.
Is Dropshipping Legal in India?
Dropshipping is a legitimate business model within the e-commerce or retail sector, and no laws prohibit it. But failing to fulfil tax and documentation responsibilities can make it illegal in practice.
However, your business remains legally compliant, depending on how you handle certain critical areas:
- You must follow GST (Goods and Services Tax) and income tax laws, which include registering for GST if required, charging and remitting GST correctly, maintaining invoices, and filing income tax returns on your profits. Failing to do so may result in penalties.
- You must comply with consumer protection laws, including providing transparent product descriptions, clearly outlining refund and return policies, and handling customer complaints in a timely and proper manner. Otherwise, your marketplace may lead to account suspension, fines, or legal issues.
- If you source products from outside India, you must follow rules for the Import-Export Code (IEC) and customs duty. Failing to comply with these can result in seizures, fines, or blocked shipments.
In short, dropshipping is entirely legal in India, but legality extends beyond simply selling products online. If you properly follow tax laws, e-commerce regulations, and other requirements, your business is safe.
Understanding the dropshipping legal requirements from the start helps to build a strong foundation for a trustworthy, scalable, and sustainable dropshipping business.
Dropshipping Legal Requirements in India
Dropshipping is a straightforward process, from the outside, where you list the products, your customer places the order, and your supplier delivers it. However, upon examining the internal operations, it reveals numerous complications and compliance issues.
The e-commerce legalities, compliance rules, infringement laws, income taxes, and consumer protection regulations require you to prove your business entity as a legitimate one to proceed safely and in the long term.
A dropshipping business primarily requires you to,
- Avoid selling prohibited goods.
- Pay your applicable income tax and GST.
- Comply with the contract laws and protect customers’ data.
- Maintain transparency and provide trust.
- Ensure that you operate a legally registered business.
Each compliance aspect builds upon the other to keep your business protected and legitimate. Now, let’s delve into the key terms for your dropshipping’s legal requirements in India, which will form the foundation of your business venture.
1. Registering Your Dropshipping Business
Starting a legally registered business identity is the first and foremost step to becoming a brand. Before you start selling your product, you need an identity for your business. This requires you to open business bank accounts, comply with tax laws and scale efficiently.
Here’s a breakdown of the most common options for registering your dropshipping business:
a. Sole Proprietorship
A business that is owned and run by a single individual without any legal separation required. It is most suitable for beginners and small-scale dropshipping sellers. To register as a sole proprietorship,
- Decide on a unique business name (which is your brand identity).
- Obtain a PAN (Permanent Account Number) card in your name (mandatory for tax purposes).
- Open a current bank account in the business name.
- Apply for GST registration once you cross the threshold limit (₹40 lakh turnover in most states, ₹20 lakh for services).
- Optional registrations: Register under MSME (Udyam) for recognition and benefits, as well as for a Shop & Establishment License, if required by your state.
b. Partnership Firm
A business jointly owned and managed by two or more people. Best suited for two well-known people to start a dropshipping business together, with low financial pressure and shared workload responsibility. For starting a partnership firm,
- Draft a Partnership Deed with details about the partners, their roles, responsibilities, and profit-sharing agreement.
- Get the deed notarised and signed by all partners.
- Apply for a PAN card in the name of the partnership.
- Open a partnership current bank account.
- Obtain GST registration if your turnover exceeds the threshold or if you sell through major marketplaces.
- Optional registrations: Register with the Registrar of Firms (recommended for legal recognition).
c. Limited Liability Partnership (LLP)
A registered entity where partners enjoy limited liability, combining flexibility with legal protection. Suitable for small to medium-sized dropshipping businesses seeking a balance between credibility and compliance. To begin your own LLP,
- Apply for Digital Signature Certificates (DSC) for partners to ensure security.
- Apply for a Director Identification Number (DIN) for partners. Each partner needs a unique DIN for the company and their LLP roles.
- Reserve a business name through the Ministry of Corporate Affairs (MCA) portal. Use the MCA-RUN service to check and book a unique LLP name.
- File incorporation documents (FiLLiP form) with Registrar of Companies.
- Draft the LLP Agreement and submit it to the MCA.
- Do complete PAN, TAN (Tax Deduction and Collection Account Number), and GST registration.
d. Private Limited Company
A separate legal entity owned by shareholders, regulated under the Companies Act. Suitable for entrepreneurs looking to scale, raise investment, or expand internationally. The steps to begin a Private Limited Company are similar to those of an LLP,
- Apply for DSC for proposed directors to securely sign electronic documents.
- Apply for a DIN for each director, which acts as a unique identity.
- Reserve a unique company name through the Ministry of Corporate Affairs (MCA) portal using the SPICe+ Part A form.
- File incorporation documents, including SPICe+ Part B, Memorandum of Association (MoA), and Articles of Association (AoA) with MCA.
- Obtain the Certificate of Incorporation from MCA, confirming your company’s legal existence.
- Apply for PAN, TAN, and GST registrations that are linked to your company and open a current bank account in the company’s name for official transactions.
Choosing the proper business structure from the base level gives your dropshipping venture a clear identity, builds trust with suppliers and marketplaces, and ensures you can scale confidently without encountering legal or financial roadblocks.
2. GST Registration for Dropshipping
The GST (Goods and Services Tax) registration is mandatory for almost every dropshipping business in India, particularly if you intend to sell on platforms such as Amazon, Etsy, or Shopify.
Even if your turnover is below the exemption limit, most marketplaces require GST registration as a condition to onboard sellers.
GST – Goods and Services Tax, GST for Dropshipping Business In India
GST in India is a comprehensive tax applied at every stage of the supply chain, from manufacturing to the final consumer. Businesses can claim credit for the tax paid on their inputs, which helps reduce the overall tax burden by taxing only the value added at each stage.
Different product types are subject to different GST slabs, and each product sold online corresponds to a unique code, which determines its applicable tax rate. GST is categorised broadly into CGST, SGST and IGST. For businesses registered in Tamil Nadu, the tax is billed under CGST and SGST. For firms from other states, IGST applies.
Regarding print on demand and fulfilment services like Qikink, your business will be considered a third-party supplier. As per Section 10(1)(b), when goods are delivered to a recipient at the direction of a third party, the place of supply is the business location of that third party, not the delivery location.
This ensures the correct application of GST based on your business’s location, providing clarity and compliance in B2C transactions. For every dropshipper, this means every sale requires GST to be charged, collected, and remitted, except in a few export cases.
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Items
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GST Requirement
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|---|---|
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Domestic sale
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Collect GST at the applicable rate on the sale price and remit it to the relevant government authority.
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Selling via marketplaces
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GSTIN is required because marketplaces deduct Tax Collected at Source (TCS) on your behalf.
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Exported goods
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Can be zero-rated with a Letter of Undertaking (LUT), or IGST paid can be claimed as a refund later.
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Claiming Input Tax Credit (ITC)
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Only possible if you have GST-compliant purchase invoices from suppliers.
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Invoicing
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GST Invoices must display HSN codes, your GSTIN, and a detailed GST tax breakdown (CGST, SGST, IGST, as applicable).
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Understanding GST on a dropshipping business is crucial to remain compliant, avail input credits, and avoid penalties when legally selling within and outside India.
Difference Between CGST, SGST, and IGST Taxes on Dropshipping
In India’s GST system, the breakdown of the GST tax has three main types of taxes applied to different modes of sales:
- The CGST (Central Goods and Services Tax) is collected by the Central Government when sales happen within the same state.
- The State Government collects SGST (State Goods and Services Tax) for the same intra-state sales.
- The IGST (Integrated Goods and Services Tax) is charged by the Central Government on sales between different states (inter-state) and on imports.
For a sale within a single state, both CGST and SGST are applicable, and the revenue is shared between the central and state governments. For sales crossing state borders or for imports, IGST is collected and then divided between the Central and the destination State Government.
Understanding these tax components helps dropshippers correctly charge GST, issue invoices, and comply with tax filings.
Need of GST for Business
Anyone can start a business with minimal paperwork and obtain a GST certificate. However, once registered for GST, companies are required to report their financial information to the government on a regular basis, typically either monthly or annually.
You can set up a trial period of 1 to 3 months, register your business, and obtain a GST certificate. After registration, you must file monthly GST returns unless you opt for the composition scheme.
The composition scheme is available for businesses with an annual turnover of under ₹2 Crores and requires payment of a fixed rate of 1% of the turnover. However, it is generally recommended to register under regular GST and file returns monthly for better compliance.
Most businesses are advised to register under regular GST and file monthly returns. Tools like Zoho Books make GST filing affordable and straightforward.
Need of GST for E-Commerce Sellers
For e-commerce sellers, GST registration is crucial to meet legal requirements and maintain trust. Key Benefits include:
- Being GST-compliant ensures your business operates within Indian tax laws.
- You can claim credit for GST paid on business-related purchases, thereby reducing your tax burden.
- GST registration enhances your business’s credibility with customers and suppliers.
- A good GST compliance rating enhances trust and unlocks additional business opportunities.
Registering for GST supports your business growth by improving compliance, reducing taxes, and expanding your market reach.
Is GST Required for Drop Shipping?
Yes, GST registration is mandatory for dropshipping businesses in India if your annual turnover exceeds ₹20 lakhs. Failing to register for GST can result in penalties and legal consequences.
Therefore, dropshippers must ensure timely GST registration and compliance to avoid any problems and run their businesses smoothly under current tax laws.
If the turnover is below the threshold, GST registration is not compulsory but is still recommended for business credibility and input tax credit benefits.
Do We Need GST to Sell Online?
GST registration is mandatory for selling online in India if your business turnover exceeds ₹20 lakhs. This requirement helps you comply with tax laws and avoid penalties. However, if your turnover is below ₹20 lakhs, GST registration is optional.
Certain essential goods, such as milk, bread, and medicines, are exempt from GST. Regardless, registering for GST enhances your business’s credibility and allows you to claim input tax credits, which can reduce your tax liability.
Complying with GST rules is essential for maintaining smooth operations and achieving long-term growth in the Indian e-commerce market.
Do I Need a GST Number for Dropshipping?
For the question, ‘Do I need GST for Dropshipping?’, GST registration is generally required for dropshipping businesses in India if your annual turnover exceeds ₹40 lakhs for goods (₹20 lakhs for services). This applies even if you do not hold stock and operate purely as a facilitator between the supplier and customer.
Failure to register or comply can lead to penalties, blocked payments from marketplaces, and legal complications. Therefore, early GST registration is highly recommended for dropshippers planning to scale their business.
How to Register GST for Online Selling
Let’s know how to apply and file your GST for your dropshipping business, in a detailed step-by-step review:
- Visit the official GST portal and click on “Services,” then choose “Registration” followed by “New Registration.”
- Enter your PAN number, mobile number, email address, and state on the first form, then submit to receive OTPs.
- Verify your contact details using the OTPs sent to your mobile and email.
- After verification, a Temporary Reference Number (TRN) will be generated. Use this TRN to log in and fill out the detailed Part B form.
- In Part B, provide all business-related information, including principal place of business, details of promoters or partners, bank account information, and contact details.
- Upload required supporting documents such as PAN card, Aadhaar card, scanned photographs, proof of business address, bank statement or cancelled cheque, and authorisation letter if applicable.
- Review all information and submit your application by verifying it through a Digital Signature Certificate (DSC), Electronic Verification Code (EVC), or e-signature.
- Once submitted, an Application Reference Number (ARN) will be generated that can be used to track the status of your application.
- The GST officer will review your application and documents; upon approval, you will receive your GST Identification Number (GSTIN) and a GST registration certificate.
- You can download your GST certificate directly from the GST portal and start filing GST returns.
Filing GST Returns for Dropshipping Business
To file GST returns, you’ll need your sales invoices, purchase bills, tax collected on sales, and tax paid on purchases. For compliance, two monthly returns and one annual return are required.
First, report all sales invoices in GSTR-1 by the 11th of the following month. Then, file GSTR-3B by the 20th, summarising your sales, purchases, and input tax credits. If you sell through marketplaces, you can also reconcile TCS from GSTR-8 in this filing.
Can I Use One GST Number for Multiple Businesses?
Yes, you can use one GST number for multiple businesses if they are located in the same state and owned under the same PAN. Each business unit will be treated as a separate vertical under this single registration.
However, each business must maintain its own sales and purchase records and file consolidated GST returns to remain compliant with the regulations. This approach simplifies tax management while ensuring accurate reporting.
For example, sales in one state are invoiced with IGST (interstate tax), while sales within the same state use CGST and SGST. You must file GST returns showing both sales invoices and purchase bills accordingly.
GST Rates and HSN Codes
Each product category has a unique HSN code and tax rates, which help classify goods for GST purposes. When creating a GST-compliant invoice, it is crucial to specify the correct HSN code for your product and apply the corresponding GST rate. India introduced a simplified GST 2.0 structure in September 2025, replacing the previous slab rates.
Under this new system, businesses now follow streamlined GST rates of 5% and 18% for most goods and services, while a higher 40% GST rate applies only to luxury and sin goods. For eCommerce and dropshipping businesses, the key applicable rates are 5% and 18%, making compliance more straightforward.
HSN stands for Harmonised System of Nomenclature. It is a code system used internationally to classify products for taxation. In India, HSN codes are usually eight digits, and each code group includes similar products for GST purposes.
The first two digits denote the chapter (HS 61 – apparel and clothing), along with the next two digits say the heading where the product belongs (HS 6101 – Men’s or Boys’ overcoats, jackets and others), and the next two digits define the subheading (HS 610120 – Made of Cotton). The last two digits specify a country’s national tariff or trade system.
HSN Code for Dropshipping
Using the correct HSN code is essential for dropshipping sellers to charge the correct GST rates and file accurate invoices. To find your product’s HSN code,
- Visit for GST’s official HSN finder.
- Search by product name, review options, and match the closest fit.
- Always use the exact HSN for all product listings, purchases, and sales invoices.
GST filing is a crucial step to follow in the dropshipping business. Now, let’s discuss the topic of paying taxes further, including a breakdown of income tax in dropshipping.
3. Dropshipping Income Tax
Just like any other business, your dropshipping profits are subject to income tax under the Income Tax Act, 1961. Even though you don’t hold inventory, it is important to maintain organised records of all sales, expenses, and profits to file accurate tax returns and avoid penalties.
Income tax returns must be filed annually through the Income Tax Department’s e-filing portal. Based on your estimated tax liability, paying advance tax quarterly is mandatory to avoid interest penalties. Proper recordkeeping of invoices, bills, and bank statements is vital to support your filings and handle any future tax audits.
Step-by-Step Compliance for Dropshipping Income Tax
For beginners, registering and filing income tax for a dropshipping business is straightforward:
- Register your business under a suitable structure (Proprietorship, Partnership, LLP, or Private Limited) and obtain a PAN card.
- Maintain proper records of all sales, expenses, and payments throughout the year.
- If your turnover is under ₹2 crore, you may opt for the Presumptive Taxation Scheme(Section 44AD), paying tax on 6% of your gross turnover without maintaining full books. For example, if your sales are ₹30 lakhs yearly, your taxable income under this scheme would be ₹1.8 lakhs.
- Calculate taxable income = Gross revenue – Allowable business expenses.
- File your Income Tax Return (ITR) before the due date (using the correct form for your business type), through the Income Tax Department Portal.
- Pay advance tax quarterly if your annual tax liability exceeds ₹10,000.
- Store invoices, receipts, and bank statements safely, as they may be required during audits.
By following these guidelines, dropshippers can ensure full compliance with Indian tax laws, optimise their tax payments, and avoid penalties, setting a strong foundation for sustainable business growth.
How to Pay Taxes on Dropshipping
Paying taxes is easy and can be done entirely online when following these simple steps,
- Visit the Income Tax e-Filing Portal and click e-Pay Tax.
- Enter your PAN and verify with an OTP, or log in if you have an account.
- Choose the tax type (like Advance Tax or Self-Assessment Tax), assessment year, and enter the amount.
- Select a payment method (net banking, UPI, debit/credit card) and complete the payment.
- Download and save the challan receipt as your proof of payment.
- For GST payments, file returns and pay taxes on the GST Portal by the monthly deadlines.
Do Drop Shippers Pay Taxes in India?
Yes, drop shippers in India are required to pay taxes. The taxes applicable to dropshipping businesses in India include GST, income tax, and any other applicable taxes per Indian taxation laws.
Understanding current tax rates and thresholds helps dropshippers plan their finances more effectively and stay compliant. Here’s a quick overview of the central taxes applicable in India for the current financial year.
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Tax Type
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Applicable To
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Threshold Limit
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Current Tax Rate
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|---|---|---|---|
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GST
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All taxable supplies
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₹40 Lakhs (Normal States) ₹20 Lakhs (Special Category States)
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Major slabs: 5% and 18%. Special rates for sin/luxury goods: up to 40%
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Income Tax
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Resident individuals
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Basic exemption ₹3,00,000 (FY 2024‑25 / AY 2025‑26)
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Slab rates from 5% to 30% plus surcharge and health & education cess
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Corporate Tax
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PVT LTD, LLP (taxed as a company)
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Based on taxable income
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25% plus applicable surcharge & cess
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By understanding your potential income, maintaining proper records, and following the simple tax payment steps, you can confidently run a compliant dropshipping business in India that grows sustainably and avoids legal hurdles.
4. Import/Export Compliance for Dropshipping
If your dropshipping business sources products from outside India, understanding the import/export compliance is essential. Even though you don’t physically handle the goods, Indian law still requires you to follow customs, taxation, and licensing rules for smooth operations.
Import Export Code (IEC)
- An IEC is a mandatory 10-digit code issued by the Directorate General of Foreign Trade (DGFT) that enables legal import and export operations from India.
- Dropshippers must obtain an IEC code before importing goods. The IEC application is fully digital on the DGFT portal, and the code has lifetime validity with annual profile updates required.
- Operating without an IEC when engaging in international trade can result in your shipments being stopped and fines being imposed.
Customs Duties and Taxes
- Imports attract customs duties based on HS codes.
- Integrated GST (IGST) is levied on imported goods at the time of customs clearance and is creditable against your GST liabilities in India.
- Accurate customs documentation, such as Bill of Entry, Commercial Invoice, and Bill of Lading, is crucial to prevent delays.
Restricted and Prohibited Products
- Certain products are restricted or banned for import/export in India, including narcotics, hazardous chemicals, ivory, and others.
- Special certifications or permits may be required for restricted categories, such as food products (FSSAI – Food Safety and Standards Authority of India) and pharmaceuticals (CDSCO – Central Drugs Standard Control Organisation).
- Dropshippers must verify supplier compliance and documentation before listing such products for sale.
How to Get an Import Export Code (IEC)?
- Visit the official DGFT portal and apply online.
- Provide your PAN card, business registration documents, and bank account details.
- Pay the registration fee, which is around ₹500.
- After verification, the IEC is usually issued within 1 to 2 working days.
Having an IEC is mandatory for dropshippers involved in international trade, as it legalises your import and export activities with the Indian government. Ensure you obtain your IEC promptly to avoid delays or penalties associated with importing or exporting goods.
5. Consumer Protection & Laws
Dropshipping in India is also governed by the Consumer Protection (E-Commerce) Rules, which ensure fair trade practices and protect customers’ rights. Compliance with these rules is essential to avoid legal trouble and maintain credibility with marketplaces and buyers. The key legal obligations towards buyers are said to be,
- Be transparent about your products by describing them with accurate images, specifications, and prices, including applicable taxes, to avoid misleading customers.
- Provide a clear, easy-to-understand refund and return policy compliant with the Consumer Protection (E-Commerce) Rules, 2020. Customers have the right to return defective or unsatisfactory products within a defined period.
- Set up a system to address customer complaints promptly and fairly. Maintain records of complaints and resolutions as required by law.
- Include GST in pricing and ensure invoices are GST-compliant, clearly displaying all relevant tax details, including HSN codes and GSTIN.
- Protect customer data in accordance with India’s Information Technology Act, 2000, guidelines to maintain privacy and prevent breaches.
- Avoid false advertising, hidden charges, or unfair contract terms that may mislead or exploit consumers.
Dropshipping businesses should regularly review consumer protection laws and update their policies accordingly to stay current with evolving regulations and best practices in the e-commerce industry.
6. Intellectual Property & Trademark Compliance
In dropshipping, protecting your brand identity and avoiding intellectual property violations is as essential as paying taxes. Since you don’t manufacture the products yourself, you must be careful about the items you sell and how you represent your business. Always remember to,
- Avoid using copyrighted images, logos, or product descriptions without the rights or licenses.
- Never sell replicas of branded goods or items that infringe on patents or trademarks.
- Source products from suppliers who can prove the authenticity and legality of what they offer.
- Build your own brand and register your business name and logo under the Trademarks Act, 1999, which prevents others from copying your identity and helps create long-term brand value.
- Follow the intellectual property guidelines of platforms like Amazon, Etsy, or Shopify. They are strict about copyright and trademark infringements.
By following the guidelines of the legal requirements properly, paying your taxes, and respecting customer protection and intellectual property laws, dropshippers can establish a trustworthy, long-lasting brand that distinguishes itself from generic resellers.
Common Mistakes to Avoid in Dropshipping
Even with the best intentions, many new dropshippers encounter avoidable legal issues. So make sure to avoid these common mistakes in your dropshipping business,
- Ignoring marketplace rules, such as the GSTIN requirement or prohibited product lists.
- Failing to secure customer data and privacy in line with the IT(Information Technology) Act and upcoming data protection laws.
- Providing false or misleading advertising claims about products, delivery, or pricing.
- Listing or importing goods banned or restricted by Indian regulations or lacking needed certifications/safety approvals.
- Using copyrighted images, designs, or trademarks from stock or suppliers without proper licensing.
- Overlooking data privacy rules, such as storing customer information without safeguards or sharing it insecurely.
GST structure on selling Clothes in India
From September 22, 2025, the GST rate on clothing in India has been revised to simplify taxation and make everyday apparel more affordable. Clothes priced up to ₹2,500 are subject to a GST rate of 5%, reduced from the earlier 12% slab for items under ₹1,000. For garments priced above ₹2,500, the GST rate increases to 18%, up from the previous 12%.
This updated GST framework also applies to textile products, such as woven fabrics, synthetic yarns, and accessories like blankets and tapestries, which are generally taxed at a rate of 5%. The restructuring aims to promote ease of compliance and enhance the affordability of apparel for consumers.
Businesses must accurately classify their products using HSN codes to apply the correct GST rate on invoices, ensuring smooth tax filings and compliance with the 2025 regulations.
Start Your Dropshipping Business in India with Qikink (Free to Start)
If you want to start dropshipping in India without an upfront investment, Qikink makes it simple with its print on demand and order fulfilment services. You can sell custom products, such as t-shirts and merchandise, under your own brand, without needing to hold inventory or manage shipping.
When a customer places an order, Qikink prints, packs, and ships the item directly to them. You get paid first and pay Qikink their wholesale rate; the rest is your profit. This lean approach enables you to test new ideas, scale quickly, and focus on customer engagement, while Qikink handles fulfilment and logistics.
Ready to start your dropshipping journey? Sign up with Qikink today to launch your online store quickly, focus on growing your brand while they handle the rest.
How to start Amazon dropshipping in India in 2025: A step-by-step guide
Final Thoughts
Starting a dropshipping business in India offers an incredible opportunity to enter e-commerce with minimal upfront investment and flexible operations. From business registration, GST, income tax, and IEC code, to following consumer protection laws, every step ensures your store runs smoothly and legally.
By following this comprehensive guide and using trusted platforms like Qikink for seamless order fulfilment, entrepreneurs can focus on their business identity and acquiring customers while minimising legal risks.
Take the first step as soon as you have a legal advisor to guide you on this journey. With legal guidance and with the help of this professional guide, you will have a clear path and a solid idea to start your business, and there will be no stopping you from achieving success.
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Frequently Asked Questions
How to file taxes for dropshipping?
You must file GST returns monthly or quarterly, depending on your annual turnover, and pay income tax on your yearly profits. Maintain invoices and records, file GST returns via the GST portal, and income tax returns on the Income Tax Department’s e-filing portal. Consult a tax professional for accurate filing.
Do I need sales tax registration for dropshipping business?
India no longer has a separate “sales tax” system. Instead, companies must register under GST (Goods and Services Tax) if their annual turnover exceeds ₹20 lakhs (₹10 lakhs in some states). GST registration is required, even if you sell through online marketplaces like Shopify, Amazon, or Flipkart.
Can I start dropship without GST number?
Technically yes, if your turnover is below the threshold, but most marketplaces and platforms require GST registration for onboarding sellers, so it’s best to register early.
Do we need GST to sell on Shopify?
Yes, Shopify sellers are required to comply with Indian GST laws. If your turnover exceeds the GST threshold, you are required to register and charge GST on all sales. You can also integrate Shopify with India’s best print on demand service, Qikink.
Does dropshipping need a license?
You need to register your business and obtain the applicable licenses, such as GST registration and an Import Export Code (IEC), if you are sourcing internationally. No special license is specifically for dropshipping, but compliance with standard trade laws is mandatory.
