TMI Blog2019 (10) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... The applicant is collecting service charges for the usage of electronic commerce platform like listing services, payment collection etc. and the applicant has admitted GST liability on the above service charges collected and declaring the same in the returns - This turnover is not subject matter of this application for advance ruling and hence not considered. Applicant is operating an electronic commerce platform and is providing a platform for the obtaining the services of drivers by the consumers - HELD THAT:- The drivers are the suppliers of services which are separate supplies and the treatment of the taxability of this transaction is not a subject matter of the advance ruling - However, it is pertinent to note that section 9(5) of the CGST Act 2017 does not shift the liability of these services provided by the drivers from the drivers themselves to the e-commerce operator. 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 suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into between them and the applicant shall under no circumstances be party to such agreement. The extract of Para II of the User terms and conditions, as hosted on the applicant s website, is reproduced by the applicant as the same reads as follows: DriveU itself does not provide transportation services. It is upto the User to offer transportation. DriveU only acts as intermediary between the Driver and you. The provision of the Services by the Driver to you is, therefore, subject to the agreement (to be) entered into between the Driver and you. DriveU shall under no circumstance be a party to such agreement. DriveU disclaims any and all liability in respect of the Drivers including any claimes of employment or any vicarious liability arising out of the Service or otherwise. 4. The applicant elaborates the modus operandi is as follows: a. DriveU aims at bringing drivers/ operators (service providers) and customers owning private cars on a common platform by which the said customers can place a request for the services of a professional driver for commute. b. The e-commerce platform brings the customer into contact with a driver so as to av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on date of this application, only three services have been notified by way of Notification No. 17/2017 Central Tax (Rate). d. The following are the categories of services notified under Section 9(5) of the CGST Act, 2017 in respect of which the electronic commerce operator would be liable to pay tax: a. Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle. b. Accommodation services in hotels or commercial places meant for lodging purposes, except where the person supplying such service through the electronic commerce operator is liable for registration on account of having aggregate turnover in excess of ₹ 20 Lakhs (₹ 10 Lakhs in case of special category States) c. House keeping services, such as plumbing, carpentering, etc. except where the person supplying such service through the electronic commerce operator is liable for registration on account of having aggregate turnover in excess of ₹ 20 Lakhs (₹ 10 Lakhs in case of special category States) d. Section 52 of the CGST Act, 2017 provides for collection of tax at source which mandates every electronic c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant 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 comprehensive understanding of the GST implications, the same have been dealt with, in this application. Section 52 of the CGST Act, 2017 provides for the conditions on the fulfilment of which an electronic commerce operator will be required to collect tax at source. 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 commerce operator The electronic commerce operator is not an agent of such third party supplier The third party supplier is a registered person The supply effected by the third party supplier must be a taxable supply, i.e. liable to GST The services supplied through the e-commerce operator shall not be a service specified under section 9(5) of the CGST Act, 2017 read with Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egory 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 commerce operator The electronic commerce operator is not an agent of such third party supplier The third party supplier is a registered person The supply effected by the third party supplier must be a taxable supply i.e. liable to GST The services supplied through the electronic commerce operator shall not be a service specified under section 9(5) of the CGST Act, 2017 read with Notification No. 17/2017 - Central Tax (Rate) The consideration in respect of such supplies is collected by the electronic commerce operator on behalf of the third party supplier. c. Regarding the impact on the applicant, the applicant states that since the consideration in this instance, is directly received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 platform service provider i.e. the applicant in the instant case and the recipient of the supply of service is the driver as he is the person liable to pay the consideration. The applicant is collecting service charges for the usage of electronic commerce platform like listing services, payment collection etc. and the applicant has admitted GST liability on the above service charges collected and declaring the same in the returns. This turnover is not subject matter of this application for advance ruling and hence not considered. 9.3 Regarding the third service, it is found that the applicant is operating an electronic commerce platform and is prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, 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-section (1) of section 22 of the said Central Goods and Services Tax Act. (c) It is very clear that the services provided by the drivers through the applicant s portal is not covered under item (ii) and (iii) above. On the issue whether the said services are covered under item (i) or not is decided by analyzing the nature of services supplied. (d) The analysis of the services supplied by the individual drivers is analysed and found that the drivers are not employees of the applicant and are also not hired by the applicant. They are only listed on the por ..... X X X X Extracts X X X X X X X X Extracts X X X X
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