Reverse Charge Mechanism in GST- E-Commerce Operator section 9(5) - GST Ready Reckoner - GST

Reverse Charge Mechanism in GST- E-Commerce Operator Supply of services through an e-commerce operator [ Read with Section 9(5) of the CGST Act, 2017 and 5(5) of the IGST Act 2017 ] This scenario covered by the section 9(5) of the CGST Act, 2017 and section 5(5) of the IGST Act 2017 is a special case focusing on e-commerce operates. For service-oriented businesses operating through an e-commerce operator, such as restaurant services, including cloud kitchens, housekeeping and accommodation services, and motor cabs, the liability of tax falls on the e-commerce operator. Where an e-commerce operator does not have a physical presence in the taxable territory Any person representing such e-commerce operator for any purpose in the taxable territory shall be liable to pay tax. If it does not have a representative in the said territory, e-commerce operator shall appoint a person in the taxable territory for the person of paying tax and such person shall be liable to pay tax. Clarification regarding modalities of compliance to the GST laws in respect of supply of restaurant service through e-commerce operators (ECO) ( refer this chapter ) In the following categories of services on which by the E-commerce operator shall be paid tax under intra-state supplies [ Notification No.17/2017 -Central Tax (Rate) dated 28th Jun 2017 and Notification No. 14/2017-Intergrated Tax (Rate) dated 28 Jun 2017 ] (i) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab, motor cycle, omnibus or any other motor vehicle or any other motor vehicle except omnibus. [ substituted w.e.f. 19.10.2023 vide notification no. 16/2023-Central Tax (Rate) dated 19.10.2023 ] . For Example - Ola, Uber provides a transportation of passenger services. Explanation - radio taxi means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS); maxicab , motorcab , motor cycle , motor vehicle and omnibus shall have the same meanings as assigned to them respectively in clauses (22), (25), (27), (28) and (29) of section 2 of the Motor Vehicle Act, 1988. maxicab means any motor vehicle constructed or adapted to carry more than six passengers, but not more than twelve passengers, excluding the driver, for hire or reward. [section 2(24) of the Motor Vehicle Act, 1988] motorcab means any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward. [section 2(25) of the Motor Vehicle Act, 1988] motor cycle means a two-wheeled motor vehicle, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle. [section 2(27) of the Motor Vehicle Act, 1988] motor vehicle or vehicle means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding 25 cubic centimetres. [section 2(28) of the Motor Vehicle Act, 1988] omnibus means any motor vehicle constructed or adapted to carry more than six persons excluding the driver. [section 2(29) of the Motor Vehicle Act, 1988] (ia) services by way of transportation of passengers by an omnibus except where the person supplying such service through electronic commerce operator is a company. (inserted w.e.f. 26.10.2023) Explanation - Company has the same meaning as assigned to it in clause (20) of section 2 of the Companies Act, 2013. (ii) services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under section 22(1) of the said CGST Act For Example - OYO, Makemytrip, Agoda provides the services of accommodation in hotels inns, guest, house, clubs etc. (iii) services by way of house-keeping, such as plumbing, carpentering etc. except where the person supplying such service through electronic commerce operator is liable for registration under section 22(1) of the said CGST Act . For Example - Urban Company provides the services of plumbers, electricians, teachers, beauticians etc. (iv) supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises, specified premises means premises providing hotel accommodation service having declared tariff of any unit of accommodation above ₹ 7,500/- per unit per day or equivalent. [ w.e.f. 01.01.2022 ] Compulsory Registration under GST for Recipient : All persons who are fall above categories of scenario, required to pay tax under RCM have to register for GST, irrespective of the threshold limit even if not engaged in the taxable supply. The Act s provisions will apply in such a manner that the e-commerce operator, as if he is the supplier liable to pay tax on the application of those services. Case Law M/S. Opta Cabs Private Limited ( 2018 (12) TMI 711 - AAAR, Karnataka ) Levy of GST - electronic commerce operator or not Issue :- The main issue in the case was whether the Appellant, OPTA Cabs Pvt Ltd, is an e-commerce operator and if so, whether they are liable to pay tax on the service supplied through their platform in terms of Section 9(5) of the CGST Act. Decision :- The Appellate Authority for Advance Ruling (AAAR) held that the Appellant is an electronic commerce operator as per the definition given in Section 2(45) of the CGST Act. The AAAR also held that the services of transportation of passengers supplied through the Appellant's electronic platform and digital network would be liable to tax at the hands of the Appellant.