2024 (11) TMI 330 - AAR - GST

E-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 the supply of services by the drivers to their customers under the proposed business model.

Issue-wise Detailed Analysis:

1. Qualification as an E-commerce Operator:

The Applicant sought clarification on whether they meet the definition of an e-commerce operator as per Section 9(5) of the CGST Act, 2017. The Applicant proposed a new business model where technology services are provided to connect drivers with riders via an online platform. The Applicant argued that they only provide a digital platform for connection and do not participate in the actual supply of transportation services.

Upon examination, the Authority referred to Sections 2(44) and 2(45) of the CGST Act, which define "electronic commerce" and "electronic commerce operator." The Authority concluded that the Applicant owns and operates a digital platform for the supply of services, thus qualifying as an Electronic Commerce Operator (ECO).

2. Liability to Collect and Pay GST:

The second issue was whether the Applicant is liable to collect and pay GST on services provided by drivers through their platform. The Applicant contended that they are not involved in the supply of transportation services, nor do they collect fare from riders, and thus should not be liable under Section 9(5).

The Authority examined the conditions under Section 9(5) and Notification No. 17/2017-Central Tax (Rate), which specify that certain services, including passenger transportation by motor vehicles, shall have GST paid by the ECO if supplied through it. The Authority noted that the Applicant's platform facilitates the entire transaction process, including onboarding drivers, connecting them with riders, and displaying fare estimates. Although the Applicant does not collect the fare, the platform enables the transaction from start to finish.

The Authority determined that the services are indeed supplied "through" the Applicant's platform, fulfilling the condition under Section 9(5). Therefore, the Applicant is deemed liable to pay GST on the supply of passenger transportation services conducted through their platform.

Conclusion:

The Authority ruled that the Applicant qualifies as an e-commerce operator under Section 9(5) of the CGST Act, 2017, and is liable to collect and pay GST on the services supplied by drivers to their customers through the Applicant's platform. The ruling emphasized that the Applicant's platform plays a crucial role in facilitating the supply of transportation services, thus bringing it within the ambit of the GST liability provisions for e-commerce operators.

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