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TMI Blog2019 (10) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of services by another person through the e-commerce platform operated by the applicant? 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that he operates a technology based electronic platform service called "DriveU" which seeks to provide drivers on demand to customers who wish to obtain the services of a driver. b. The drivers offering their services on the DriveU platform are individuals and independent service providers who have opted to enlist themselves with DriveU. The drivers are screened and trained prior to being listed as a driver on the DriveU platform. At no point can the driver represent himself to be an employee of Humble Mobile Solutions Private Limited / DriveU. The user terms and conditions hosted on DriveU website expressly provide that the drivers are independent service providers and are not employees of the applicant. c. Further, the applicant states that DriveU, in itself does not provide driving or transportation services. The customer offers the mode of transportation. The terms and conditions clearly state that the provision of services by the driver to the customer is, subject to the agreement enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion whether the applicant is liable to pay tax for supply of services by another person through e-commerce platform operated by the applicant, the applicant states as under: a. Electronic Commerce has been defined to mean the supply of goods or services or both, including digital products over digital or electronic network. b. An Electronic Commerce Operator has been defined to mean any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. c. The Government vide Section 9(5) of the CGST Act, 2017 is empowered to notify, specific categories of services, the tax on which shall be paid by the electronic commerce operator if such services are supplied through it, and the electronic commerce operator shall for all intents and purposes be deemed to be the supplier liable for paying the tax in relation to the supply of such services. All the provisions of the GST Law would then apply to the electronic commerce operator since the electronic commerce operator is deemed to be the supplier of service. However, as on date of this application, only three services have been notified by way of Notification No. 17/2017 Central Tax (Rate) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f. The applicant's business model is as under: The applicant's business model can be summarized as under: a. Provides a platform by which third party service providers are allowed to enlist themselves as drivers on its platform b. The services provided by the drivers is not a category of service which has been notified under section 9(5) of the CGST Act, 2017 read with Notification No. 17/ 2017 - Central Tax (Rate) c. Consideration for services provided to customers is i. Collected by the applicant on behalf of third party service providers (i.e. drivers) through online payment options ii. Paid directly to the drivers In view of the above, the applicant submits that he, as an electronic commerce operator may be classified under category (c) or (d) of para 5(f) above. 6. Regarding the GST treatment for supplies falling under Category (c) of para 5(f) above, the applicant submits as under: a. The GST Law prescribes a mechanism for tax collection at source. It may be noted that the effective date for provisions relating to TDS have not been notified; consequently, the same are not applicable as on the date of this application for Advance Ruling. However, for a compre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be applicable and as a result of which, the applicant would be required to effect TCS on the value of service collected by it from passengers on behalf of the third party service providers (i.e. drivers). It must be noted that any amount paid by the customers directly to the drivers would not attract the provisions of TCS. The onus for discharge of tax liability on the services provided by the drivers to the customers rests solely on such drivers. The drivers will be responsible for filing periodic returns and remitting taxes after setting off TCS credit available in the electronic credit ledger. 7. Regarding the GST treatment for supplies falling under Category (d) of para 5(f) above, the applicant submits as under: a. This transaction, though similar to Category c, differs on the grounds that the consideration for the supply of service by the third party service provider is not collected by the electronic commerce operator through whom the services have been supplied. b. As explained earlier, the provisions of TCS would be triggered in the event of the following: * Supply of goods or services or both must be effected by a third party supplier through an electronic comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also mean a reference to the same provisions under the KGST Act. 9.1 The activity of supply of the applicant is examined and it is seen that there are three supplies involved in the entire transactions - first supply is providing drivers to the consumers, second supply is that of e-commerce services to the drivers and the third supply is the provision of manpower service by the drivers to the consumers. 9.2 Regarding the first supply, i.e. providing drivers to the consumers, the applicant is only acting as an intermediary through the e-commerce platform, wherein the consumers who are in need of drivers would log in to the portal and select the driver. The drivers are listed in the e-commerce platform and the contract is between the drivers and the consumers, with the applicant acting as a facilitator. In some cases, the consideration for this service is received by the applicant on behalf of the drivers and the same would be paid to the drivers. Hence the applicant is not providing drivers to the consumers but only facilitating the consumers and drivers to come together for provision of service. 9.3 Regarding the second supply, the supplier of services is the e-commerce platfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:" By virtue of this sub-section, the liability for payment of tax in relation to intra-State supplies of notified services supplied through an e-commerce operator would be on the e-commerce operator and not on the actual supplier. (b) Notification No. 17/2017-Central Tax dated 28.06.2017 (as amended from time to time) notifies the following services as notified services under section 9(5) of the CGST Act: (i) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle; (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 sub section (1) of section 22 of the said Central Goods and Services Tax Act. (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 sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the applicant for the services provided by the drivers to the consumers, on behalf of the drivers, the same shall be liable to collection of tax at source under subsection (1) of section 52 of the CGST Act, 2017. Further, it is pertinent to note that the provisions of section 52 of the CGST Act, 2017 had come into force from 1st October, 2018 by virtue of Notification No. 51/2018 - Central Tax dated 13.10 2018. It is also pertinent to note that every person who supplies goods or services or both (other than those supplies specified under sub-section (5) of section 9), through an e-commerce operator who is required to collect tax at source under section 52 is liable to be registered compulsorily under section 24 of the CGST Act, 2017. 11. In view of the foregoing, we pass the following RULING The applicant is not liable to pay tax for the supply of services by drivers through the e-commerce platform operated by the applicant, but he is liable to pay tax on the services provided to the drivers. Further, the applicant is liable to collect tax under section 52 on the net value of taxable supplies made by the drivers through it where the consideration with respect to such supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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