The Provisions w.r.t GST payable by ECO on Notified services are contained under Section 9(5) of CGST/SGST/UTGST Act. Similar Provisions are also contained under section 5(5) of IGST Act.
Electronic Commerce Operator (ECO) is any person who owns/operates/manages an electronic platform for supply of goods/services/both.
Sometimes, ECO itself supplies the goods or services or both through its electronic portal. However, many a times, the products/services displayed on the electronic portal are actually supplied by some other person to the consumer. When a consumer places an order for a particular product/ service on this electronic portal, the actual supplier supplies the selected product/ service to the consumer. The price/ consideration for the product/ service is collected by the ECO from the consumer and passed on to the actual supplier after the deduction of commission by the ECO.
As per Provisions of GST Law, The Government may, on the recommendations of the GST Council, notify specific categories of services the tax [CGST/SGST/IGST] on supplies of which shall be paid by the electronic commerce operator (ECO) if such services are supplied through it. Such services shall be notified on the recommendations of the GST Council.
The Government vide Notification No. 17/2017 CT (R) dated 28.06.2017/ Notification No. 14/2017 IT (R) dated 28.06.2017 as amended has notified the following categories of services supplied through ECO for this purpose–
- Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle, omnibus or any other motor vehicle. For e.g. OLA, Uber.
In case of aforesaid services Liability to pay GST will remain with ECO irrespective of the fact whether actual service provider have Registration under GST law or not.
Suppose, Moter Bike/Cab services supplied by Ola Driver are subjected to GST payment by OLA even if such OLA Driver have its own GST registration under GST.
- 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 CGST Act. For e.g. OYO.
- 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-section 22(1) of the CGST Act. For e.g. UrbanClap.
We need to understand that in case of Clause (ii) & (iii) if the Actual Supplier is liable for Registration under GST law or he has taken registration voluntarily then Liability for GST will be also of Actual Supplier not ECO.
Let's understand this with an example, A Hotel, registered in GST Law supplies room rent services through OYO, then Hotel is liable for GST on same. If such a hotel is not registered under GST Law then ECO (OYO) will liable for GST. Similar Provisions are also there of clause (iii). However, in the case of Clause (i) liability for GST will remain with ECO irrespective of the fact whether the actual service provider have Registration under GST law or not.
Further, The Government vide Notification No. 17/2021 CT (R) dated 18.11.2021 has notified Restaurant Service under section 9(5) of the CGST Act, 2017. Accordingly, the tax on supplies of restaurant service supplied through e-commerce operators like Swiggy, Zomato shall be paid by the e-commerce operator.
Before this amendment, Restaurant service supplied through ECO are subject to GST @5% by the restaurant service supplier itself only if he is liable to obtain registration under GST Law due to his Turnover exceeding Specified Limit or he is obtained GST Registration voluntarily.
Now after Amendment, Restaurant service supplied through ECO are subject to GST @5% by ECO irrespective of the fact whether Restaurant service supplier is registered under GST law or not.
The Government has ensured GST Collection on restaurant services supplied through ECO.
We also need to remember two things, First, All Restaurant services supplied other than through ECO are continue subject to GST by the Restaurant Service provider itself.
And Second is, this amendment doesn't require from restaurant service provider to get GST Registration if his turnover doesn't exceed the prescribed limit for GST Registration. However, Services supplied by such person through ECO will subject to GST by ECO.
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