I get weekly commissions from Hong Kong in US Dollars which are credited into my trading account(not bank account) with company. I access this trading account and convert my accumulated us dollar into online electronic cards which is used for internet payment.. Suppose I have 1000 us dollars in my trading account at Hong Kong then I convert it into virtual Electronic Card of 1000 US Dollar. Now when I do business in india by selling any product to customer I collect cash from customer and make the payment online for the product using this Online Electronic Card. So my commission in US Dollar gets converted into CASH (Indian Rupees). Is this system of getting commission legal in India ? Do I need to pay any tax(Income Tax or Sales Tax / Vat / Service Tax) on this commission in India ? If I need to pay tax then what is the process and what are the documents required as proof of income ?

Without a doubt you will have to pay sometime as soon as the Indian Tax inspector get hold of you. If you are in the Internet Business and if you can do the same job somewhere else, it would be much better to do the job in different countries for several a month at a time to avoid such hassle! But you should really consult tax experts in your country you are doing business.