E-Commerce Operators liable to pay GST on Restaurant Services W.E.F. 01-01-2022:-
The GST Council, in its 45th meeting held on 17th September 2021, recommended notifying *Restaurant Service* under section 9(5) of the CGST Act, 2017. Accordingly, to effectuate this recommendation, *Notification No. 17/2021 (CTR)* dated 18.11.2021 has been issued, and now a separate clarification vide *Circular No. 167 / 23 /2021–GST*, dated: 17-12-2021, also has been issued to the extent that the e-commerce operators (ECO) are liable to pay GST on restaurant services.
So, the scenario is as ‘restaurant service’ has been notified under section 9(5) of the CGST Act, 2017, *the ECO shall be liable to pay GST* on restaurant services provided, with effect from the *1 January 2022*, through ECO. The ECOs will *no longer be required to collect TCS* and file GSTR 8 in respect of restaurant services on which it pays tax in terms of section 9(5). On other goods or services supplied through ECO, which are *not notified u/s 9(5)*, ECOs *will continue to pay TCS* in terms of section 52 of CGST Act, 2017 in the same manner at present. As ECOs are already registered under rule 8(in Form GST-REG 01) of the CGST Rules, 2017 (as a supplier of their own goods or services), there would be *no mandatory requirement of taking separate registration* by ECOs for payment of tax on restaurant service under section 9 (5) of the CGST Act, 2017.
The aggregate turnover of a person supplying restaurant service through ECOs shall be computed as defined in section 2(6) of the CGST Act, 2017, and shall include the aggregate value of supplies made by the restaurant through ECOs. Accordingly, for threshold consideration or any other purpose in the Act, *the person providing restaurant service through ECO shall account for such services in his aggregate turnover*.
It may also be noted that on restaurant service, ECO *shall pay the entire GST liability in cash*. No ITC could be utilized for payment of GST on restaurant service supplied through ECO. ECOs provide their *own services as an electronic platform and an intermediary* for which it would acquire inputs/input service on which ECOs avail input tax credit (ITC).
The ECO charges commission/fee etc. for the services it provides. The ITC is utilized by ECO for payment of GST on services provided by ECO on its own account (say, to a restaurant). The situation in this regard remains unchanged even after ECO is made liable to pay tax on restaurant service. ECO would be eligible to ITC as before. Accordingly, ECO *shall not be required to reverse ITC on account of restaurant services* on which it pays GST in terms of section 9(5) of the Act. Well!!! These clarifications issued well ahead of the date of implementation will go a long way in a correct understanding of the legislative requirements and compliance of the same.
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