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2021 (9) TMI 1065 - AAR - GSTClassification - E-Commerce Operator or not - intends to own, develop an electronic/digital platform for booking of cabs - Requirement of registration under GST - GST to be levied in accordance to Section 9(5) of the CGST Act, 2017 or not - valuation of supply for passenger transportation service on which Goods and Service Tax (GST) - Rate of Tax and Service Accounting Code for the services supplied in terms of passenger transportation service - HELD THAT - The applicant has expounded the position of law and has arrived at its conclusions. Appellant is liable to be registered in view of Section 24(iv) of CGST Act, 2017 - appellant is liable to pay GST as if he is the supplier of service i.e. passenger transportation services. Value of supply will be equal to Ride charge less Discount in view of Section 15(1) (3)(a) of CGST Act, 2017 - the services supplied in terms of passenger transportation service will be taxable at the rate of 5% under Service Accounting Code 996412 as per Scheme of Classification.
Issues Involved:
1. Liability of the applicant to be registered and classified as an E-Commerce Operator. 2. Liability of the applicant to pay or discharge Goods & Service Tax (GST) under Section 9(5) of the CGST Act, 2017. 3. Determination of the value of supply for passenger transportation service on which GST is to be charged. 4. Rate of Tax and Service Accounting Code for the services supplied in terms of passenger transportation service under GST Law. Detailed Analysis: Issue 1: Liability to be Registered and Classified as an E-Commerce Operator The applicant, M/s. Gensol Ventures Pvt. Ltd, intends to develop a digital platform for booking cabs. According to Section 2 of the CGST Act, 2017, the definitions of "electronic commerce" and "electronic commerce operator" include the supply of goods or services over a digital network and any person who owns, operates, or manages such a platform, respectively. The applicant falls under this category and is required to register under Section 24(iv) of the CGST Act, 2017, as they are liable to pay tax under Section 9(5). Issue 2: Liability to Pay or Discharge GST Under Section 9(5) of the CGST Act, 2017 Section 9(5) of the CGST Act, 2017, specifies that the government may notify categories of services where the tax on intra-State supplies shall be paid by the electronic commerce operator. Notification No.17/2017-Central Tax (Rate) dated 28-6-2017 includes services by way of transportation of passengers by a radio-taxi, motorcab, maxicab, and motorcycle. The applicant, being an electronic commerce operator, is liable to discharge the amount of tax as if they are the supplier of these services. The applicant must comply with all provisions of the CGST Act, including raising invoices, collecting consideration, discharging GST, and filing returns. Issue 3: Determination of the Value of Supply for Passenger Transportation Service The value of supply is determined under Section 15 of the CGST Act, 2017. Section 15(1) states that the transaction value is the price actually paid or payable for the supply of goods or services. Section 15(3) allows for the exclusion of discounts given before or at the time of supply if recorded in the invoice. The applicant offers discounts to customers, which are recorded as marketing expenses. Therefore, the value of supply for passenger transportation service shall be the net amount after deducting the discount from the gross value. GST is not applicable on the discount amount, as clarified by the GST flyer dated 1-1-2018 issued by the CBIC. Issue 4: Rate of Tax and Service Accounting Code for Passenger Transportation Services Notification No.11/2017-Central Tax (Rate) dated 28-6-2017 specifies the rate of tax for various services. For passenger transport services by radio taxi, the applicable rate is 5% (2.5% CGST + 2.5% SGST) as per Entry No.8(ii) of the notification. The Service Accounting Code (SAC) for these services is 996412. The applicant must ensure that the credit of input tax charged on goods or services used in supplying the service has not been taken, as per the conditions specified in the notification. Ruling: 1. M/s. Gensol is an e-commerce operator and shall be liable to be registered. 2. M/s. Gensol is liable to pay GST as per Section 9(5) CGST Act. 3. The value of supply for passenger transportation service shall be the net amount arrived after the deduction of discount (to be provided by M/s. Gensol to the customer) from the gross value. 4. The SAC for subject supply is 996412. The GST shall be leviable @ 5% (2.5% CGST + 2.5% SGST) subject to the fulfilment of the condition at Entry No.8 (ii) of cited Notification 11/2017-CT(R) dated 28-6-2017.
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