GSTN issues guide to report Section 9(5) supplies by e-commerce operators in GSTR-3B

The Goods and Services Tax Network (GSTN) issued a GST advisory on Tuesday, 4th January 2022. All e-commerce operators have to report supplies under Section 9(5) of the CGST Act, in particular tables of GSTR-3B.

The GSTN guides both the e-commerce operators and the e-tailers or those who supply through it to report the sales figures in GST returns. The e-commerce operators must report such supplies in Table 3.1 (a) of GSTR-3B. In contrast, suppliers or restaurants must report this in table 3.1(c) together with nil-rated and exempt supplies.

It applies to restaurant services, motor cabs, accommodation and housekeeping services provided through an electronic commerce operator under Section 9(5) of the CGST Act.

Recently, the Central Board of Indirect Taxes and Customs (CBIC) released the Central Tax (Rate) and 17/2021-Integrated Tax (Rate) dated 18th November 2021. It was to notify the GST Council’s recommendation at the 45th meeting. The government added restaurant services, cloud kitchens, and passenger transport motor vehicles of all kinds under the scope of Section 9(5). The section defines that e-commerce operators will be liable to pay GST on supplies made through it on behalf of the suppliers. 

Hence, from 1st January 2022, the e-commerce operators must pay the taxes on restaurant supplies made through them at a 5% rate. These supplies are other than cases where it collects TCS under Section 52 of the CGST Act. 

Also, the government issued a detailed clarification on the new notification and its implementation. CBIC released CGST Circular No. 167 / 23 /2021 – GST on 17th December 2021. 

The following details were given in the Circular:

1. All the e-commerce operators covered under Section 9(5) must neither collect TCS under Section 52 nor file GSTR-8 return. But the rest should continue to collect TCS and file GSTR-8 returns.
2. e-Commerce operators need not obtain separate GST registration by Section 9(5) if they are already registered e-commerce operators to supply restaurant services.
3. e-Commerce operators will become liable to pay GST under Section 9(5), where businesses selling services through them are GST registered or not.
4. Total aggregate turnover for e-commerce operators will be computed as per Section 2(6) and shall include the sale value of restaurant service made through them.
5. The restaurant services supplied through e-commerce operators cannot be viewed as inward supplies subject to tax under reverse charge.
6. For all the restaurant services supplied through it, the e-commerce operators must pay the entire GST liability in cash. No Input Tax Credit (ITC) can be utilised.
7. An e-commerce operator need not reverse the ITC for the restaurant services liable for GST under Section 9(5).
8. They shall charge regular taxes for supplies made on their account and notify TCS. However, it applies to cases other than restaurant services made through e-commerce operators.
9. e-Commerce operators will raise invoices for restaurant service supplied through it. E-commerce operators must issue different bills for restaurant services and others.
10. For reporting in GST returns, the e-commerce operator must report these supplies in Table 7A(1) or Table 4A of GSTR-1 and GSTR-3B. The restaurant providing service via an e-commerce operator shall report these supplies in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B.

For any clarifications/feedback on the topic, please get in touch with the writer at annapoorna.m@cleartax.in