TMI Blog2021 (12) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) and no other issue can be decided by the Advance Ruling Authority. Section 52(1) of the Act, provides for collection of an amount calculated @1% on the net value of taxable supplies made through it by other suppliers. Thus, it is evident that the provision itself clearly distinguishes that the e-commerce operator is different from the Suppliers . As per Section 95(a) read with Section 103 (applicability of the Ruling), it is clear that the ruling is applicable to the supply being made or proposed to be made and the ruling extended is binding only on the Supplier who makes such supply, his jurisdictional officer and the concerned officer. In the case at hand, the applicant seeks ruling on the supplies being made through their platform by the Concerned suppliers mentioned at Section 52 and the questions raised are not on the supplies being made or proposed to be made by him. Further, the provision at 97(2)(e) allows this authority to admit questions on determination of the liability to pay tax. The applicant, who is an e-commerce operator, and not the supplier of Raw water and Sewage Evacuation Services, the question raised on the classification of supply, applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkers come under supply of raw water or under transport services? 3. Does Bookwater have to withhold any tax (GST TCS 1% from the suppliers before making payments for the supply of raw water through our platform? 4. Is the supplier making raw water sale is required to register under GST since they are transacting through an e-commerce operator? 5. Does Sewage Evacuation come under 18% GST? If yes, most individual sewage tanker operators have turnover less than 20Iakhs per annum. Since we are not billing the customer directly and are only billing on behalf of the supplier, will the exemption limit of ₹ 20 Lakhs per annum he applicable to suppliers individually? 6. Consequently, is GST Registration applicable for all suppliers through the Bookwater platform or only applicable for those suppliers who have a turnover over 20Lakhs? 7. Does Bookwater have to withhold any tax (GST TCS 1% applicability) from the suppliers before making payments since the supplies have been made through our digital platform and we also deduct our charges for our services rendered before making payments? The Applicant has submitted the copy of application in Form GST ARA 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exempt Supply Sec 2(47); Tax Collected at source Sec 52 of the CGST Act 2017. They have also referred to Section 22. 23, 24 of CGST Act 2017 regarding GST registration. The applicant has submitted that under Section 24 of CGST Act 2017 clause ix and x states (ix) Persons who supply goods or services or both, other than supplies specified under sub section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52; (x) Every electronic commerce operator who is required to collect tax at source under section 52; In view of the above statutory provisions, the applicant has submitted that they are covered under the definition of electronic commerce operator since, they operate and manage a digital platform for the customers and the supplier to complete their commercial transactions. They have also stated that the suppliers who transact with the platform are also covered under the definition of electronic commerce since, they supply goods or services or both over time applicant s digital platform or their electronic network. Hence the supplies made through their digital platform will be regarded as Electronic Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not covered under notified rates of tax will be taxable at 18% GST on the value of services being rendered. Sewage Evacuation services are covered under the SAC (Service Accounting Code) - 099411 Sewerage and sewage treatment services 999412 Septic tank emptying and cleaning services Hence the suppliers already having GSTIN or is liable to get themselves registered under this Act is required to charge 18% on the value services rendered. Hence the rate of GST shall be at 18% by the supplier and with regard to the exemption limit applicability to suppliers individually, the Government vide via (Notification No. 85/2017-Central Tax, dated 15:11.2017 amended vide Notification No. 6/2019-Central Tax, dated 29 Jan-2019, w.e.f. 1-Feb-2019) has given that The services shall be exempt to tax if supplier providing services through an ecommerce operator if the aggregate turnover does not exceed ₹ 20 Lakhs (or the applicable threshold limit for registration under GST). Hence, the applicant has stated that since majority of their suppliers by service of sewage evacuation are below the current threshold limit of ₹ 20 Lakhs. they are not required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements with suppliers and invoice copies and the applicant agreed to furnish the same. 3.2 The applicant submitted the following documents on 07.10.2021 Supplier agreement copy Consumer payment policy Consumer privacy policy Consumer terms of use Original invoice for water supply Sample invoice for sewage evacuation 3.3 The applicant was issued with a letter dated 20.10.2021 informing the applicant that their supply involves extending web platform/mobile application to connect the service provider (supplier of water tankers/sewerage off lake facility) and is not involved in supplying water tankers/tankers for offtake of sewerage. Hence the fact. that the questions raised by the applicant do riot pertain to the supply made by than and therefore not admissible under Section 95(a)/97(2) of the GST Act and hence, the applicant was asked to furnish their interpretation of the questions raised in the application, along with need/willingness to be heard again. 3.4 The applicant vide their email dated 16.11.2021 submitted the following facts: The applicant is an Electronic Commerce Operator as defined under Sec. 2(45) of the Central Good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator (emphasis supplied).They are an electronic commerce operator as mentioned supra and the consideration with respect to supplies is also collected by them as per sec 52 of the Act furthermore as per the sec 52, an electronic commerce operator shall collect 1% (one percent) of the net value of taxable supplies. Also, the question raised by, them in the application was, whether TCS (Tax collected at source) of 1% has to be withheld by them from the suppliers before making payments which is it relevant question under 97(2)(c) of the Act since the TCS is applicable only on taxable supplies, therefore only if they know whether the supply made through their platform is a taxable supply or not, the said TCS can be deducted by them from the suppliers. In so far as questions 4, 5 and 6 are concerned according to section 97(2)(b) any applicant can seek an advance ruling from the Authority on the applicability of any notification issued under the Act. The Government issued a Notification No.65/2017 Central Tax, dated 15.11.2017 amended vide notification No. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate the transaction between the supplier and customer. Further, from the copies of Invoice furnished before us, it is seen that the invoice mentions the seller as the supplier and the details of such suppliers are mentioned apart from the Billing details. Delivery address and Tanker charges, Convenience Fees and Payment Gateway Service Charges are part of the bill charges raised by them. The applicant in their submissions has stated that they are raising the Invoice on behalf of the suppliers and they do not bill any customers directly and they do not buy and sell water in any way and also not involved in the service of sewage evacuation. 6.2 With the above factual position, the admissibility of the questions tinder Section 95(a) read with Section 97(2) of the GST Act., 2017 are taken up for examination. The questions on which the Ruling is sought before us are listed as tinder: 1. Does raw water that is supplied through tankers through the Bookwater platform come under exempted goods as well? 2. Does the supplier of water through tankers come under supply of raw water or under transport services? 3. Does Bookwater have to withhold any tax-GST TCS 1% from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, according to Section 97(2)(b) any applicant can seek an advance ruling from the Authority on the applicability of any notification issued under the Act. Notification No. 65/2017-CT dated 15.11.2017, amended vide Notification No. 06/2019-CT dated 29.01.2019 pertains to the exemption limit applicable to suppliers (Suppliers here, means the water tanker and sewage evacuation suppliers) individually, which has a direct implication on them as aggregators, therefore any notification which has an implication on their suppliers will also have an implication on their liability to pay tax and hence comes within the ambit of Section 97(2)(e) of the Act. 6.3 The definition of advance Ruling under section 95(a) of CGST/TNGST Act is given below for case of reference: (a) advance ruling means a decision provided by the Authority or the Appellate Authority to on applicant on matters or on questions specified in sub section (2) of section 97 or sub section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant; Section 97(2) of the CGST Act / Tamil Nadu on Act (TNGST) gives the scope of Advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operator, the collection of TCS depends on the net value of the taxable supplies made through it as per Section 52 of the Act and therefore, the questions raised on the supplies made through the digital platform are admissible for ruling and has a direct implication to their supply. Section 52 of the Act, States as under: 52. (1) Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the operator ), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator. Explanation. For the purposes of this sub-section, the expression net value of taxable supplies shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to his own determination, in which case, the ruling loses its relevance and applicability even. Any law provision has to be interpreted in a constructive and harmonious way keeping in mind the object of the purpose of the provision. All parts of it should be read in aid of and not in derogation of that purpose. Any interpretation, if it defeats the very purpose of the objective and purpose of the law provision, is not only incorrect but also improper and bad in law . Thus the applicant, who is an e-commerce operator, and not the supplier of Raw water and Sewage Evacuation Services, the question raised on the classification of supply, applicability of Notification for such suppliers, is not the question on supplies being or proposed to be undertaken by him. Therefore, we do not have any hesitation, to hold that the questions raised (except Q. No. 3 , 7), do not pertain to the supply of the applicant and are not admissible for ruling as per Section 95(a)/103 read with Section 97(2) of the Act. 6.5 In respect to Q. No.3 7, the applicant has sought ruling as to whether the applicant is to withhold TCS from the suppliers before making Payments to the Concerned suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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