GST registration is required for ECommerce operators who book taxis.
Facts and Issue of the Case
The applicant M/s. Gensol Ventures pvt.ltd intends to own, develop an electronic/digital platform for booking of cabs. The applicant vide submission dated 13-8-2021 submitted that the drivers will list their electric motor vehicles on the proposed electronic platform/App for booking by the customers for the passenger transportation services; that E-Commerce Operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce and considering this, the applicant can be termed as a E-Commerce Operator; that the Electric Motor Vehicle operated by the Drivers will be in connection with Central Office and can be tracked through Global Positioning System(GPS) or General Packet Radio Service(GPRS) and qualify as radio taxi.
The applicant has submitted that the key steps involved in the process of booking of cab, invoicing and collection of consideration are set out as follows:
- Customer uses the electronic/digital platform of the applicant to book a cab.
- The digital platform connects the customer with cabs listed by Driver/s.
- Driver/s provides the passenger transportation service.
- Upon completion of the ride, the applicant raises a tax invoice on the customer and collects the entire consideration from the customer and will be held liable to pay GST. This is as per Section 9(5) of the CGST Act, 2017 read with Notification No.17/2017-Central Tax(Rate) dated 28-6- 2017.
- The applicant charges commission to the Driver/s for providing digital platform to get connected with the potential customers.
- Customer pays to the applicant for the ride charges.
- The applicant remits the amount to Driver/s by deducting amount towards commission.
- The applicant will pay applicable GST to the Government on ride charge as per Section 9(5) and commission on forward charge.
Questions on which Advance Ruling sought.
- Whether the applicant is liable to be registered and classified under the Category of E-Commerce Operator?
- Whether the applicant is liable to pay or discharge Goods & Service Tax(GST) in accordance to Section 9(5) of the CGST Act, 2017”
- If answer to Q 2 is yes, what shall be the value of supply for passenger transportation service on which Goods and Service Tax(GST) be charged?
- What shall be Rate of Tax and Service Accounting Code for the services supplied in terms of passenger transportation service under Goods & Service Tax Law?
Observation of the court
At the outset court would like to make it clear that the provisions of CGST Act and GGST Act are in parimateria and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the GGST Act.
Court has carefully considered all the submissions made by the applicant. Court finds that the applicant has expounded the position of law and has arrived at its conclusions as reflected at Paragraph 5(xiv). Court agrees with the submission of the applicant and find that the applicant has enunciated and expounded the position of law crystal clear with respect to subject.
M/s Gensol is an e-commerce operator and shall be liable to be registered.
M/s Gensol is liable to pay GST as per Section 9(5)CGST Act.
The value of supply for passenger transportation service shall be the net amount arrived after the deduction of discount (to be provided by M/s Gensol to the customer) from the gross value.
The SAC for subject supply is 996412. The GST shall be leviable @ 5% (2.5% CGST + 2.5% SGST) subject to the fulfilment of the condition at Entry No.8 (ii) of cited Notification11/2017-CT(R) dated 28-6-2017.