Presently, restaurant services provided through E-Commerce Operator were taxed at supplier level.

However, vide Notification No.17/2021, dated November 18, 2021, the section 9(5) of the GST Act has been amended to include restaurant services provided through E-commerce operator like ZOMOTO, SWIGY, UBER Eats, and many such food delivery apps. With this amendment, now e-commerce operator will be supposed to collect and pay tax under restaurant services.

Section 9(5) deals with the taxability of services and the output tax that must be paid by the electronic commerce operator, or E-COM, if such services are provided through it (even though E-COM is not an actual supplier)

Section 9(5) of the CGST Act, 2017, had previously notified three services. i.e., Rent a cab service, accommodation services, and housekeeping services.

Impact on TCS – ECO will no longer be obliged to collect TCS and file GSTR 8 for restaurant services on which it pays tax, and which are notified under section 9 of the Act (5). TCS will continue to be charged on any other goods and services provided by ECO.

Registration – There is no obligation for ECOs to register separately in order to pay tax on restaurant services.

Aggregate turnoverThe person providing restaurant services through ECO must account for such services in his aggregate turnover for threshold consideration or any other purpose specified in the Act.

Reverse charge mechanism – ECOs will be required to pay GST on the forward charge mechanism on any restaurant service provided through them, including those provided by unregistered individuals.

Input Tax Credit – It may also be noted that on restaurant service, ECO shall pay the entire GST liability in cash (No ITC could be utilised for payment of GST on restaurant service supplied through ECO)

On supplies other than restaurant services – GST will continue to be billed, collected and deposited in the same manner as is being done at present. ECO will deposit TCS on such supplies.

Issue of Invoice –The invoice in respect of restaurant service supplied through ECO under section 9(5) will be issued by ECO.

Reporting in the GST return.

  • ECO shall disclose this turnover in Table 3(1) of GSTR-3B and in Table 7A(1) or Table 4A of GSTR-1, as the case maybe.
  • Registered persons supplying restaurant services through ECOs will report such supplies of restaurant services made through ECOs in Table of GSTR-1 and Table 3.1 (c) of GSTR-3B as Nil Rated Supplies.

Disclaimer:  This Article is only a knowledge sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc if any

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