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2024 (11) TMI 330 - AAR - GSTE-commerce operator or not - nature of supply as conceptualized in Section 9 (5) of CGST Act, 2017 read with notification No. 17/2017 dated 28.06.2017 - liability of appellant to collect and pay GST on the supply of services supplied by the drivers/service provider (person who has subscribed to online Uber platform in relation to proposed business model) to their customers (person who has subscribed to online Uber platform) identified on the Uber s platform) under the proposed business model. HELD THAT - The applicant is squarely covered in the definition of electronic commerce operator and the supply of services by way of transportation of passengers in the proposed commission free monetization model by an auto-rickshaw, radio-taxi, motorcab, maxicab and motor cycle is supplied through them. Further, by virtue of Section 9 (5) the applicant is liable to pay tax on the supply of the services of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle.
Issues Involved:
1. Whether the Applicant qualifies as an e-commerce operator under Section 9(5) of the CGST Act, 2017. 2. Whether the Applicant is liable to collect and pay GST on services supplied by drivers through the proposed business model. Detailed Analysis: Issue 1: Qualification as an E-commerce Operator The Applicant, a technology service provider, proposes a business model where it offers a digital platform connecting drivers with riders for passenger transportation services. The Applicant contends that it merely facilitates this connection and does not control the service provision. However, the definition of an "electronic commerce operator" under Sections 2(44) and 2(45) of the CGST Act includes any entity that owns, operates, or manages a digital platform for electronic commerce. The Applicant's platform facilitates the supply of services over a digital network, thus qualifying it as an electronic commerce operator. The Authority concluded that the Applicant fits the definition of an e-commerce operator as it owns and operates a digital platform for the supply of services. Issue 2: Liability to Collect and Pay GST The crux of the Applicant's argument is that the transportation services are not supplied "through" its platform, as it does not control the fare or collect payments. However, Section 9(5) of the CGST Act mandates that the tax on certain notified services, including passenger transportation by motor vehicles, must be paid by the electronic commerce operator if such services are supplied through it. The Applicant's platform facilitates the entire transaction process, from connecting drivers and riders to displaying fares and tracking rides, thereby fulfilling the condition of services being supplied "through" the platform. The Authority examined the operational details of the Applicant's platform, noting that it provides comprehensive support for the transaction, including fare suggestions, ride tracking, and notifications to both drivers and riders. Despite the Applicant's claim that the fare is estimated and negotiated independently, the platform determines and displays a fare, which is integral to the transaction. The Authority emphasized that the CGST Act does not require the e-commerce operator to collect the fare to be liable for GST; the mere facilitation of the service through its platform suffices. Based on these findings, the Authority ruled that the Applicant is liable to collect and pay GST on the supply of transportation services facilitated through its platform. The Applicant's reliance on previous rulings was deemed irrelevant, as each ruling is specific to its facts and circumstances. Ruling: a. The Applicant qualifies as an e-commerce operator under Section 9(5) of the CGST Act, 2017, as per notification No. 17/2017. b. The Applicant is liable to collect and pay GST on services supplied by drivers through its platform under the proposed business model.
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