1

Relevant Legal Provisions

Section Rules
Section Subject Matter Rules Subject Matter
CGST Sec. 9 Levy and collection (CGST)

IGST Sec 5 Levy and collection (IGST)

Relevant Definitions
CGST 2 (56) India 2 (98) Reverse charge
2 (108) Taxable supply 2 (44) Electronic commerce
2 (78) Non-taxable supply 2 (45) Electronic commerce operator

IGST 2 (10) Import of goods 2 (5) Export of goods

2 (11) Import of Services 2 (6) Export of services
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Power to levy GST

1. Where is the power to levy GST derived from?

(CBEC FAQ)
Ans. Article 246A (1) of the Constitution confers concurrent powers to both, Parliament and State Legislatures to make laws
with respect to GST i. e. central tax (CGST) and state tax (SGST) or union territory tax (UTGST).
However, Article 246A (2) provides exclusive power to the Parliament to legislate with respect to inter-State trade or
commerce i.e. integrated tax (IGST).

Note:
1. Intra-state supply = Supply as defined in Sec 8 of IGST Act
.

2. Inter-State supply = Supply as defined in Se 7 of IGST Act

Illustrations
Location of supplier Place of supply Applicable tax if GST is levied @18%
Intra-State supply Inter-State supply
Maharashtra Maharashtra CGST : 9%, SGST : 9% —
Maharashtra Karnataka — IGST @ 18%
Maharashtra Andaman — IGST @ 18%
Andaman Maharashtra — IGST @ 18%
Andaman Andaman CGST : 9%, UTGST : 9% —
Andaman Chandigarh — IGST @ 18%
Andaman Delhi — IGST @ 18%
Delhi Chandigarh — IGST @ 18%
Delhi Noida (UP) — IGST @ 18%
SEZ in Andhra Pradesh Non-SEZ in Andhra Pradesh — IGST @ 18%

 Supply in nature of import/ export

Supply of goods Supply of Services
Import Inter-state Supply [Sec 7(2) of IGST Act] Inter-state Supply [Sec 7(4) of IGST Act]
transaction • IGST levied and collected as per provisions of • IGST levied and collected as per IGST Act
CTA, 1975 • Value computed as per GST provisions (as contained
• Value computed as per customs provisions (as in Sec 20 of IGST Act read with Sec 15 of CGST Act)
contained in Sec 3 of CTA, 1975)
Export Inter-state Supply [Sec 7(5)(a) of IGST Act] Inter-state Supply [Sec 7(5)(a) of IGST Act]
transaction • IGST leviable • IGST leviable
• Such supply is zero-rated in terms of Sec 16 of • Such supply is zero-rated in terms of Sec 16 of IGST
IGST Act. Act.

 Supply in taxable territory (i.e., within India) which is not in nature of intra-state = Inter-state supply [Sec 7(5)(c) of IGST
Act]
.

Intra-State Supply / Inter-state supply – tax liability

2. What are the taxes that are levied on an intra-State supply?

(IDTC FAQ)
Ans. In terms of Section 9 of the CGST Act, 2017 and relevant SGST Act, intra-State supplies are liable to CGST & SGST.
In terms of Section 7 of UTGST Act, 2017, intra-State supplies effected by a taxable person located in Union Territory (within
the Union Territory) will be liable to CGST & UTGST.
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3. How the supplies to and from Union territories are treated under GST?

Ans. In the GST Act the Union territories have been divided into two categories-
• Union territories with legislature (i.e., Delhi and Puducherry) which have been included in the definition of
State. Accordingly supplies to and from such UTs and supplies from one such UT to another will be treated as inter-State
supplies chargeable to Integrated Tax. Supplies within such UTs will be treated as intra-State supplies chargeable to
Central Tax and State Tax.
• Union territories without legislature i.e., the Andaman and Nicobar Islands, Lakshadweep, Chandigarh,
Dadra and Nagar Haveli, Daman and Diu and also the area in Exclusive Economic Zone are treated as ‘Union
Territory’. Supplies to such UTs from another State or from such UTs to another State or from one such UT to another
have been deemed to be inter-State supply and would be chargeable to Integrated Tax. Supplies within such UTs would
be chargeable to UT GST that would be levied and collected under the UT GST Act.

Note:
Definition of India and status of area beyond 12 NM (NM= Nautical Miles)
GST law has defined India.
• India means the territory of the Union as referred to in Article 1 of the Constitution, its territorial waters, continental
shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf,
Exclusive Economic Zone and other Maritime Zones Act, 1976.
• India also covers the seabed and the subsoil underlying the territorial waters; the air space above its territory and territorial
waters;
.

Thus,
… India extends to beyond TWI (TWI = Sea area upto 12 NM).
… India stands extended to the limits of EEZ (EEZ = Sea area upto 200 NM).

Also note:
In TWI (upto 12 NM) Beyond TWI, but within EEZ Beyond EEZ
Location of Location in India Location in India Location outside India
Supplier Location in state/UT which is Location in ‘other Indian territory’ =
nearest to TWI Location in UT
(Sec 9 of IGST Act)

Place of PoS in India Location in India Location outside India

Supply PoS in state/UT which is PoS in ‘other Indian territory’ =
nearest to TWI PoS in UT
(Sec 9 of IGST Act) (Sec 9 of IGST Act)
.

[Imp.]
4. Exploration site is at 150 nautical miles from base line. Some minerals explored (not petroleum etc.) and sent
to refinery in Maharashtra, the nearest State. Whether this will attract IGST or CGST and SGST/UTGST?

Ans. Exploration site is location of supplier. Location of site in 150 NM is beyond territorial waters but still within
Indian territory (as for purposes of GST law, definition of India covers area upto exclusive economic zone). Such
site shall be treated as located in ‘other territory’ which is also ‘a union territory’ as defined under Sec 2(114) of CGST Act.
Exploration Site is supplying goods to refinery in Maharashtra. Thus, place of supply of goods is falling into
Maharashtra State.
Since location of supplier is union territory and place of supply is Maharashtra, it is inter-state supply in terms of Sec 7(1)
of IGST Act. Thus, aforesaid supply shall attract charge of IGST under section 5 of IGST Act.

Author’s Note
Discussion Statutory Provision
• Coastal State: TWI (territorial waters of India) shall form part of territory of coastal state. Sec 9 of IGST Act
Supplier in such area shall be treated as located in such coastal state.
However, in ours case, supplier is located beyond TWI, though within EEZ. Sec 2(81) of CGST Act
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Since, EEZ also forms part of ‘India’.
Territory beyond TWI but upto EEZ = Other Territory.
Thus, location of such supplier = Location in ‘Other Territory’ = Location in ‘Union Sec 2(114) of CGST Act
Territory’ (as other territory is included in definition of Union Territory’)
• Location of Supplier: Union Territory Section 7 of IGST Act
Place of Supply: State (coastal state) - Maharashtra
Nature of Supply: Inter state Supply
• IGST is leviable on such supply. Section 5 of IGST Act

5. What is the rate of tax that is applicable on intra-State supplies?

(IDTC FAQ)
Ans. Section 9 of CGST Act/SGST Act specifies that the Central/State Government may specify rate of tax not exceeding 20%.
Broadly four rates of CGST has been prescribed for goods, viz., 2.5%, 6%, 9% and 14%
Broadly four rates of CGST has been prescribed for services, viz., 2.5%, 6%, 9% and 14%.

Note:
1. Rates of CGST = Rates of SGST = Rates of UTGST
2. Rates of IGST = (Rate of CGST + Rates of SGST/ UTGST)

6. Whether CGST is applicable on all intra-State made by supplier?

(IDTC FAQ)
Ans. No. Section 9(1) of CGST Act which is the charging provision for levy and collection of tax on intra State supplies excludes
supply of alcoholic liquor for human consumption.
Further, in terms of Section 9(2), tax on supply of petroleum crude, high speed diesel, motor spirit, natural gas and aviation
turbine fuel is not leviable presently (it shall be levied with effect from such date as may be notified by the Government on the
recommendations of the Council).

Note:
1. As per Article 366(12-A), GST is tax on supply of goods and/or services excluding supply of alcoholic liquor for human
consumption. Thus, GST cannot be made applicable to supply alcoholic liquor for human consumption even in future (unless
constitution of India is amended)
2. GST on crude petrol, High Speed Diesel (HSD) etc. will be levied soon in near future.
.

Presently, supply of above 2 categories of products is outside the purview of GST law and is called NON-TAXABLE SUPPLY
[Sec 2(78) of CGST Act]

7. Discuss whether the following supplies are ‘intra-state supplies’:

(a) HDFC Bank (incorporated outside India) has opened up a branch in Delhi (india) and providing services to
Customers in Delhi (customers are account-holders);
(a) HDFC Bank (incorporated outside India) has formed a subsidiary company in Mumbai and is providing
services to Customers in Delhi (customers are account holder);

Ans. (a) As per Explanation I to Sec 8 of IGST Act, establishment outside India and establishment in India of same entity shall be
treated as deemed distinct persons. Thus, Delhi Branch of Foreign Bank shall be treated as distinct person with location in
Delhi (India).
Now, since the supplying entity (Delhi Branch) is located in India (Delhi) and recipient is also in India (Delhi), the place
of supply of banking service determined as per Sec 12 of IGST shall be Delhi/India (PoS as per Sec 12(12) = Location of
recipient of services in records of bank).
Further, since location of supplier (Delhi Branch = Deemed Distinct person) and place of supply of services
is also within same State / Delhi, then such supply shall be treated as intra-state supply within the meaning of Sec 8(2) of
IGST Act, 2017.

(b) Subsidiary company is a real distinct person as a company is an artificial independent person. Thus, Subsidiary
company is an independent person with location in Delhi (India).
Now, since the supplying entity (Subsidiary company) is located in India (Mumbai) and recipient is also in India (Delhi),
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the place of supply of banking service determined as per Sec 12 of IGST shall be Delhi/India (PoS as per Sec 12(12) =
Location of recipient of services in records of bank).
Further, since location of supplier (Subsidiary company in Mumbai = Real Distinct person) and place of
supply of services is in different State / Delhi, then such supply shall be treated as inter-state supply within the meaning
of Sec 7(3) of IGST Act, 2017.

Note:
1. Determination of POS for services
• If both supplier and recipient are located in India – Sec 12 of IGST Act
• Other cases – Sec 13 of IGST Act
.

8. Whether CGST & SGST/UTGST is applicable on import of goods or service or both?

(IDTC FAQ)
Ans. No
In terms of Section 7 of the IGST Act, 2017, import of goods or services or both is shall be treated to be a supply in the course
of inter-State trade or commerce. Accordingly, tax under the provisions of IGST Act, 2017 (i.e. IGST) shall apply on import of
goods or services or both.
o Import of Goods: IGST leviable u/Sec 5 of IGST Act. However, it is collected in the manner specified under Customs
Tariff Act, 1975. Valuation of such transaction is also as per provisions of Customs Law.
o Import of Services: IGST leviable u/Sec 5 of IGST Act. However, it is collected as per provisions of GST law (i.e. as
per time of supply of such transaction). Valuation of such transaction is also as per provisions of GST law.

Note: Supply in nature of import/ export

Supply of goods Supply of Services
Import Inter-state Supply [Sec 7(2) of IGST Act] Inter-state Supply [Sec 7(4) of IGST Act]
transaction • IGST levied and collected as per provisions of CTA, • IGST levied and collected as per IGST Act
1975 • Value computed as per provisions of GST Law (Sec
• Value computed as per provisions of Customs Law (as 20 of IGST Act read with Sec 15 of CGST Act)
per Sec 3 of CTA, 1975)

Export Inter-state Supply [Sec 7(5)(a) of IGST Act] Inter-state Supply [Sec 7(5)(a) of IGST Act]
transaction • IGST leviable • IGST leviable
• Such supply is zero-rated in terms of Sec 16 of IGST Act. • Such supply is zero-rated in terms of Sec 16 of IGST Act.

[Imp.]
9. Whether IGST on import of goods would be levied under IGST Act or under Customs Act?

Ans. As per Section 7(2) of IGST Act, import of goods is Inter-State Supply. Thus, import of goods also will attract charge of IGST
in terms of Sec 5 of IGST Act.
However as per Proviso to section 5:
• IGST on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the
Customs Tariff Act, 1975 on the value as determined under the said Act
• Value shall be ‘Value determined as per Sec 14 of Customs Act, 1962 + Basic Customs Duty + Other Customs Duties”

Note:
1. Import of goods being in nature of ‘inter-state supply’, it attracts charge of IGST as per Sec 5 of IGST Act.
2. However, proviso to Sec 5(1) of IGST Act provides that IGST in such case shall be levied and collected as per provisions of
CTA, 1975.
.

• Rate of IGST: as notified by GST council

• Value of IGST: [Value as per Sec 14 of Customs Act + BCD (basic Customs duty) + Other Customs Duties (e.g., SWS=
Social Welfare Surcharge levied by FA 2018)]

• Time of collection of IGST: It shall be collected at same point of time at which duties of customs is collected (i.e., if
imported goods directly cleared for home consumption, then it shall be payable on the same day on which bill of entry
for home consumption is filed – Sec 3(12) of CTA, 1975 read with Sec 47 of Customs Act, 1962]
.
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Person liable to pay GST – Supplier (and sometimes Recipient under RCM)

10. Who is responsible to pay taxes?

(IDTC FAQ)
Ans. Generally, the person effecting taxable supplies is liable to pay taxes.
However, following are certain exceptions:
(a) Reverse charge: In respect of notified categories of supply of goods or services, the tax on which shall be paid by
the recipient under reverse charge (Sec 9(3) of CGST Act and Sec 5(3) of IGST Act) *; and
(b) E-Commerce operator (ECO): In respect of notified categories of services supplied through ECO, ECO shall be liable
to pay GST. (Sec 9(5) of CGST Act and Sec 5(5) of IGST Act)

Note:
1. Supply of goods and/or services by unregistered supplier to the GST registered recipient:
o Recipient was made liable to pay GST (Sec 9(4) of CGST Act and Sec 5(4) of IGST Act)
o But, presently, such supply is exempt from payment of GST.
o Such exemption is operational till 30 Sep, 2019.

11. What is meant by reverse charge?

Ans. In terms of Section 2(98), the terms reverse charge is defined to mean liability to pay tax by the recipient of supply of
goods or services or both instead of the supplier of such goods or services or both.

 What is the effect of reverse charge on input tax credit?

Ans. Effect on recipient of supply under RCM:

 Recipient of such supply is liable to pay GST thereon. (however, value of such supply does not become his
ATO – as such supplies are his inward supplies)
 Post payment of GST, he is entitled to avail ITC of GST so paid (if he otherwise is fulfilling all conditions as to
eligibility and availment of ITC as laid down by Sec 16 of CGST Act)

Effect on supplier of supply under RCM:

 Supplier of such supply is not liable to pay GST thereon. (however, value of such supply will still form part of
his ATO – as such supplies are his outward supplies)
 He is thus not entitled to avail any ITC in relation to such supply. GST law treats such supply as equivalent to
‘exempt supply’ (Sec 17(3) of CGST Act, 2017).

12. What are the different types of supplies which are liable to tax under reverse charge mechanism?
(Study Material)
Ans. As per Section 9 of the CGST Act, 2017 there are two types of supplies which are liable to tax under reverse charge mechanism
which are:-.
1. Specified categories of supply of goods or services or both as notified by government on recommendation of the council
(Sec 9(3) of CGST Act and Sec 5(3) of IGST Act)
2. Supply of taxable goods or services or both by an unregistered supplier to a registered person (Sec 9(4) of CGST Act and
Sec 5(4) of IGST Act)

Note:
1. Supply of goods and/or services by unregistered supplier to the GST registered recipient:
o Recipient was made liable to pay GST (Sec 9(4) of CGST Act and Sec 5(4) of IGST Act)
o But, presently, such supply is exempt from payment of GST.
o Such exemption is operational till 30th Sep, 2019.
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13. Is the reverse charge mechanism applicable only to services?
(CBEC FAQ)
M/s X & Sons, tax consultant of Zenson Ltd., have advised them that reverse charge mechanism is applicable only to
services. Examine the validity of the advice given by M/s X & Sons.
(Test Series Final)
Ans. No, reverse charge applies to supplies of both goods and services, as notified by the Government on the recommendations of
the GST Council. Notification no. 4/2017-CT (Rate) and 13/2017- CT (Rate) have been issued. Similar notifications have been
issued under IGST Act also.
Reverse charge also applies to supplies received by a registered person from unregistered persons*.

Author’s Note
RCM as per Sec 9(4) of CGST Act / Sec 5(4) of IGST Act
RCM on registered persons in respect of any supply (goods or services) received from unregistered person – this RCM has been
kept in abeyance till 30th Sep, 2019 (since supply in such case has been exempted from payment of GST).

RCM as per Sec 9(3) of CGST Act / Sec 5(3) of IGST Act
• This is applicable on notified services (11 cases notified under intra-state and 13 under inter-state)
.

• This is also applicable on notified goods (8 cases notified for both intra-state and inter-state) - ICAI has excluded RCM
of goods for May, 2019 Exams.

14. What will be the implications in case of receipt of supply from unregistered persons?
(CBEC FAQ)
Ans. In case of receipt of supply from an unregistered person by a GST registered recipient, the GST registered recipient who
is receiving goods or services shall be liable to pay tax under reverse charge mechanism.
However, this provision (of reverse charge on supplies received from unregistered persons) have been kept in abeyance till
30th Sep, 2019 since such supply has been exempted from payment of GST.

E-Commerce : Third party ECO – Deemed Supplier vs Tax Collector

15. What is Electronic Commerce?

(Press release)
Ans. Electronic Commerce has been defined in Sec. 2(44) of the CGST Act, 2017 to mean the supply of goods or services or both,
including digital products over digital or electronic network.

16. Who is an e-commerce operator?

(Press release)
Ans. Electronic Commerce Operator has been defined in Sec. 2(45) of the CGST Act, 2017 to mean any person who owns, operates
or manages digital or electronic facility or platform for electronic commerce.

17. Will an e-commerce operator be liable to pay tax in respect of supply of goods or services made through it,
instead of actual supplier?
(Press release)
Ans. Yes, but only in case of services notified under Sec. 9(5) of the CGST Act, 2017.
In such cases tax shall be paid by the electronic commerce operator if such services are supplied through it and all the provisions
of the Act shall apply to such electronic commerce operator as if he is the supplier* liable to pay tax in relation to the supply
of such services.
A similar provision for inter-State supply is provided for in Sec. 5(5) of the IGST Act, 2017.

Note:
1. Notified Services: - Refer to Notification No. 17/2017-CT (Rate) and 14/2017- IT (Rate)
2. Effect of Sec 9(5): ECO becomes ‘supplier’ and thus, liable to pay GST.
.
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Note:
Supplier of Supplier has created its online platform/portal to increase its reach. Mr G = Supplier --- liable to pay GST
goods He is getting online orders and supplying goods through courier. Mr G = ECO
(Say, Mr G) .

Supplier is supplying through online platform of others – FLIPKART, Mr G = Supplier --- liable to pay GST
AMAZON etc. to increase its reach. Flipkart/ Amazon etc = ECO (liable for
He is getting online orders through these third-party ECO and TCS@1%)
supplying goods through courier.

Supplier of Supplier has created its online platform/portal to increase its reach. Mr S = Supplier --- liable to pay GST
services He is getting online orders and supplying services. Mr S = ECO
(Say, Mr S) .

Supplier is providing services as notified u/Sec 9(5) of Mr S = Supplier ------ Sec 9(5) applicable
CGST Act. (3 types of services) Ola/ Uber etc = ECO (Applying Sec 9(5) -
Supplier is supplying through online platform of others – OLA, OYO, Deemed as Supplier) – liable to pay GST
URBANCLAP. to increase its reach. (now, TCS provisions not applicable to ECO)
He is getting online orders through these third-party ECO and
supplying services.
Supplier is providing services not notified u/Sec 9(5) of Mr S = Supplier --- liable to pay GST
CGST Act. MMT / bookmyshow etc = ECO (liable for
Supplier is supplying through online platform of others – MMT TCS@1%)
(make my trip), bookmyshow etc. to increase its reach.
He is getting online orders through these third-party ECO and
supplying services.
.

[Imp.]
18. Can any person other than the supplier or recipient be liable to pay tax under GST?
(Study Material)
Ans. Yes, in terms of provisions of Sec 9(5) of CGST Act, the Government can specify categories of services the tax on which
shall be paid by the Electronic Commerce Operator, if such services are supplied through it and all the provisions of the GST
law shall apply to such electronic commerce operator as if he is the supplier* liable for paying the tax in relation to supply
of such services.
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19. What services have been notified u/Sec 9(5) of CGST Act, 2017 making ECO liable for payment of GST?
(Study Material)
Ans. Under provisions of Sec 9(5) of CGST Act, following services have been notified:
1) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;
2) 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 u/Sec 22(1) of the CGST Act.
3) services by way of house-keeping, such as plumbing, carpentering etc, except where the person supplying such service
through ECO is liable for registration u/Sec 22(1) of the CGST Act.

Note:
Similar provisions exists in Sec 5(5) of IGST Act which provides for charge of IGST.
Under provisions of Sec 5(5) of the IGST Act, same services have been notified:
1) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;
2) 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 u/Sec 22(1) of the CGST Act.
3) services by way of house-keeping, such as plumbing, carpentering etc, except where the person supplying such
service through ECO is liable for registration u/Sec 22(1) of the CGST Act.

20. OLA Cab has just signed up Mr Amar (taxi owner engaged in providing service of transportation of passenger by
a radio taxi) to provide services through its platform. State who is person liable to pay GST under following
situations:
Nature of supply Already achieved TO in the FY at time of signing up
(1) Intra-state supply 6 lakhs
(2) Intra-state supply 30 lakhs
(3) Inter-state supply 6 lakhs
(3) Inter-state supply 30 lakhs

Ans. Under provisions of Sec 9(5) of CGST Act, following services have been notified:
Nature of supply Already Status at time of Applicability Person liable to pay
achieved TO signing up - of 9(5) / GST on supplies onward
at time of Registered under 5(5) provided through ECO
signing up GST
(1) Intra-state supply 6 lakhs Not registered 9(5) OLA CAB/ ECO liable to pay
(intra-city taxi service) (Sec 22 of CGST Act) GST
(2) Intra-state supply 30 lakhs Registered 9(5) OLA CAB/ ECO liable to pay
(intra-city taxi service) (Sec 22 of CGST Act) GST
(3) Inter-state supply 6 lakhs Not registered 5(5) of IGST OLA CAB/ ECO liable to pay
(inter-state taxi service) (Sec 24 of CGST Act Act GST
read with
Notification issued
u/Sec 23(2))
(4) Inter-state supply 30 lakhs Registered 5(5) of IGST OLA CAB/ ECO liable to pay
(inter-state taxi service) (Sec 24 of CGST Act) Act GST

21. OYO Hotel has just signed up OM Hotel (hotel providing short-term accommodation service – rooms rental of Rs
3000 + GST) to provide services through its platform. State who is person liable to pay GST under following
situations:
Nature of supply Already achieved TO in the FY at time of signing up
(1) Intra-state supply 6 lakhs
(2) Intra-state supply 30 lakhs
12
Ans. Under provisions of Sec 9(5) of CGST Act, following services have been notified:
Nature of supply Already Status at time of Applicability Person liable to pay
achieved TO signing up - of 9(5) / GST on supplies onward
at time of Registered under 5(5) provided through ECO
signing up GST
(1) Intra-state supply 6 lakhs Not registered 9(5) OYO Hotel / ECO liable to
(Sec 22 of CGST Act) pay GST
(2) Intra-state supply 30 lakhs Registered N.A. OM Hotel liable to pay GST
(Sec 22 of CGST Act)

22. Urban Clap has just signed up Mr Shambhu (plumber engaged in providing housekeeping services/ plumbing
work) to provide services through its platform. State who is person liable to pay GST under following situations:
Nature of supply Already achieved TO in the FY at time of signing up
(1) Intra-state supply 6 lakhs
(2) Intra-state supply 30 lakhs
(3) Inter-state supply 6 lakhs
(3) Inter-state supply 30 lakhs

Ans. Under provisions of Sec 9(5) of CGST Act, following services have been notified:
Nature of supply Already Status at time of Applicabili Person liable to pay GST
achieved TO at signing up - ty of 9(5) on supplies onward
time of signing Registered under / 5(5) provided through ECO
up GST
(1) Intra-state supply 6 lakhs Not registered 9(5) Urban Clap/ ECO liable to pay
(Sec 22 of CGST Act) GST
(2) Intra-state supply 30 lakhs Registered N.A. Mr Shambu liable to pay GST
(Sec 22 of CGST Act)
(3) Inter-state supply 6 lakhs Not registered 5(5) of Urban Clap / ECO liable to
(Sec 24 of CGST Act IGST Act pay GST
read with
Notification issued
u/Sec 23(2))
(4) Inter-state supply 30 lakhs Registered 5(5) of Urban Clap / ECO liable to
(Sec 24 of CGST Act) IGST Act pay GST

23. AB Pvt. Ltd., Pune provides house-keeping services in Maharashtra. The company supplies its services
exclusively through an e commerce website owned and managed by Hi-Tech Indya Pvt. Ltd., Pune. The turnover
of AB Pvt. Ltd. in the CY is Rs. 18 lakh.
Advise AB Pvt. Ltd. as to whether they are required to obtain GST registration. Will your advice be any
different if AB Pvt. Ltd. sells readymade garments exclusively through the e-commerce website owned and
managed by Hi-Tech Indya Pvt. Ltd.?
(CA Final, MTP - May 2018)
Ans. Hi-Tech Indya Pvt. Ltd. is an ECO as it is owning and managing a website for e commerce.
AB Pvt Ltd, Pune is making intra-state supplies of house-keeping services and it is supplying exclusively through Hi-Tech Indya
Pvt. Ltd (the ECO). In such a scenario, the ECO shall be deemed to be supplier of house-keeping services in view of Sec 9(5)
of CGST Act. Thus, Hi-Tech Indya Pvt. Ltd (the ECO) shall be liable to take registration and pay GST.
.

AB Pvt. Ltd., the real supplier of service, will not be liable to pay GST and to take any registration.

GST implications if AB Pvt Ltd is supplying goods through ECO

Sec 9(5) which provides for deeming ECO as ‘supplier’ for purposes of GST, is applicable only in respect of supply of
notified services through ECO. It is not applicable in case of supply of goods through ECO.
 13
In case AB Pvt. Ltd is supplying readymade garments / goods through ECO, then it will retain its status of ‘supplier’. Further, it
shall be liable to take compulsory registration in terms of Sec 24 of CGST Act. In such situation, role of ECO will be
‘collection of tax at source” @1% in terms of Sec 52 of CGST Act.
Thus, in case AB Pvt Ltd. is supplying goods through ECO, it shall be liable to take compulsory registration irrespective of the
fact its turnover is only 18 Lakhs.

[Imp.]
24. A hotel owner provided accommodation in Haryana, through an electronic commerce operator – Cool Trips. The
hotel owner is not liable to get registered as per the provisions of section 22(1) of the CGST Act.
• Who is the person liable to pay GST in this case?
• Would your answer be different if the Electronic Commerce Operator Cool Trips does not have a physical
presence in India?
Note: Hotel owner is running budget hotel with ATO below threshold exemption limit of 20 lakhs*.
(Study Material)
Ans. As per section 9(5) of CGST Act*, Government may notify [on the recommendations of the GST Council] specific categories
of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are
supplied through it. Services by way of providing accommodation in hotels through electronic commerce operator
is a specified service for said purpose.
• Thus, person liable to pay GST in this case is the Electronic Commerce Operator Cool Trips. All the provisions of the GST
law shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the
supply of such services.
.

If Cool Trips does not have a physical presence in India, person liable to pay tax is the person representing the Electronic
Commerce Operator -Cool Trips for any purpose in India.

Note:
1. Accommodation services provided by Hotel: PoS of such service = Location of immovable property
2. Such supply will be intra-state supply (as location of hotel and PoS falls in same state / Haryana)

3. Such hotel an intra-state supplier may be one whose ATO is within threshold exemption of 20 lakhs or may be one whose ATO
is more than threshold exemption limit of 20 lakhs. (for Haryana, threshold exemption is 20 lakhs).
 Hotel with ATO upto 20 lakhs: Such hotel is not required to take GST registration u/Sec 22(1) of CGST Act. In respect of
supply of accommodation services by such hotel through ECO, ECO shall be liable to pay GST.
.
 Hotel with ATO more than 20 lakhs: Such hotel is required to take GST registration u/Sec 22(1) of CGST Act. In respect
of supply of accommodation services by such hotel through ECO, hotel will remain liable to pay GST.
.

25. A hotel owner is providing following services:

a) Room renting for lodging purposes;
b) Banquet renting for holding functions;
c) Restaurant services;
His ATO from all the above services is 40 lakhs. His ATO being more than threshold exemption of 20 lakhs, he is
liable to take registration u/Sec 22(1) of CGST Act.
Such hotel owner has now started providing above services through ohoroom.com (USA based website).
Whether in such case in respect of any of service provided through ECO, ECO shall be liable to pay GST in terms
of Sec 9(5) of CGST Act?

Ans. As per section 9(5) of CGST Act*, ECO is liable to pay GST only in respect of notified services supplied through ECO.
 One of the notified service is service 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 u/Sec 22(1) of the CGST Act.

Liability of ECO to pay GST:

 Room renting service: ECO shall not be liable to pay GST. Since ATO of hotel is more than threshold exemption and it
is liable to take GST registration u/Sec 22 of CGST Act, such renting service does not fall into notified category of service.
Thus, GST shall be payable by hotel under forward charge.
 Banquet renting service: Such renting service has not been notified, thus ECO shall not be liable to pay GST. Thus, GST
shall be payable by hotel under forward charge.
14
 Restaurant service: Restaurant service has not been notified, thus ECO shall not be liable to pay GST. Thus, GST shall
be payable by hotel under forward charge.

Note:
1. In none of above cases, supply of services through ECO is not making the ECO liable to pay GST.
2. However, ECO shall be liable to comply with TCS provisions as laid down by Sec 52 of CGST Act (if consideration for
such supply is collected through ECO)
• ECO shall act as tax collector and shall collect TCS@1% in such supply transaction (0.5% CGST + 0.5% SGST) (TCS
provisions have been made applicable from 1st Oct, 2018)
• As tax collector, ECO shall be liable to take compulsory registration u/Sec 24 of CGST Act.
• He shall file return (GSTR-8) on monthly basis – by 10th.
• He shall pay TCS on monthly basis (by 10th)
• TCS element so paid by him and shown in his return shall be auto-populated to GSTR-2A of the supplier and from there,
it shall be transferred to e-cash ledger of supplier.
.

26. Discuss under following situations, who is liable to pay GST and take GST registration:
ECO Representative of ECO
in India
1 X owns a radio taxi. He provides his service in Mumbai Taxiwala, Mumbai ……….
through Taxiwala, Mumbai.
2 X owns a radio taxi. He provides his service in Haryana UNI Taxicab USA. C & Co., Haryana
and Delhi through UNI Taxicab USA.
Ans.
ECO Representative Person liable to pay
of ECO in India GST
1 X owns a radio taxi. He provides his Taxiwala Ltd., ………. Taxiwala Ltd., Mumbai
service in Mumbai through Taxiwala, Mumbai (located
Mumbai. in India)
2 X owns a radio taxi. He provides his UNI Taxicab Ltd C & Co., Haryana C & Co, the Indian
service in Haryana and Delhi through USA (located representative of UNI
UNI Taxicab (USA based website). outside India) Taxicab Ltd., USA shall be
liable to pay GST.