2019-VIL-330-DEL-CE

SGST Advance Ruling Authority

GST – Karnataka AAR – Sections 2(44), 2(45) and Section 9(5) of the CGST Act, 2017 - E-Commerce Operator – Interpretation of phrase “services supplied through electronic commerce operator” in Section 9(5) of the CGST Act - Applicant provides computer application services for facilitating business transactions of goods or services or both connecting both suppliers and recipients register under the applicant’s APP on payment of membership charges and subscription fee – Whether the applicant satisfies the definition of an e-commerce operator and liable to discharge tax liability in terms of Section 9(5) of the CGST Act 2017 – HELD - Electronic Commerce Operator (ECO) means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce i.e. for the supply of goods or services or both, including digital products over digital or electronic network - In the instant case the applicant owns digital platform for the supply of goods or services or both. Thus the applicant fits into the definition and qualifies to be an Electronic Commerce Operator - the word “through” in the phrase “services supplied through electronic commerce operator,” in Section 9(5) of the CGST Act gives the meaning that the services are to be supplied by means of / by the agency of / from beginning to the end / during entire period by e-commerce operator - In the instant case, the applicant, because of their unique business model, merely connects the driver and passenger and their role ends on such connection; applicant do not collect the consideration; neither do have no control over actual provision of service by service provider nor have the details of the ride; they also do not have a control room/call centre etc. thus, the supply happens independent of the applicant as it is involved only in the identification of the supplier of services and does not take responsibility for the operational and completion of the ride - in the present case, the supply of services are not through the electronic commerce operator, but are independent. Therefore, the applicant does not satisfy the conditions of Section 9(5) for the discharge of tax liability by electronic commerce operator – thus, applicant, though qualifies the definition of being an e-commerce operator, is not the person liable for discharge of tax liability under Section 9(5) of the CGST Act, 2017 – Ordered accordingly - Whether the supply by the service provider, who has subscribed the Applicant’s app, to his customers on the applicant’s computer application amounts to supply by the applicant; and whether the applicant is liable to collect and pay GST on the supply of goods or services supplied by the service provider on applicant’s app – HELD - The supply by the service provider (person who has subscribed to Applicant’s app) to his customers (who also have subscribed to Applicant’s app) on the Applicant’s computer application does not amounts to supply by the Applicant - The Applicant is not liable to collect and pay GST on the supply of goods or services supplied by the service provider (person who has subscribed to Applicant’s app) to his customers (who also have subscribed to Applicant’s app) on the Applicant’s computer application

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