E-Commerce Operator (ECO) is liable to collect tax under section 52 where the consideration is to be collected by ECO for such services.
Facts- The applicant is a Private Limited Company and is registered under the Goods and Services [Tax] Act, 2017. The applicant has sought advance ruling in respect of the following question : Whether the applicant is liable to pay tax for supply of services by another person through the e-commerce platform operated by the applicant?
The applicant states that he operates a technology based electronic platform service called “DriveU” which seeks to provide drivers on demand to customers who wish to obtain the services of a driver. The drivers are independent service providers and are not employees of the applicant. Further, the applicant states that DriveU, in itself does not provide driving or transportation services. The services may be paid for by the customers either :
- In cash, directly to the driver, or
- Through online payment options, to the applicant.
Held- The Authority of advance ruling held that the drivers are not supplying the services in their vehicles but are driving the vehicles belonging to the recipients of services and hence are not providing “services of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle” but are providing manpower services namely “driving a motor vehicle services” which is not covered under item (i) of the Notification No. 17/2017-Central Tax and hence not covered under Section 9(5) of the CGST Act. 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 supplies made by the drivers through it where the consideration with respect to such supplies is to be collected by the applicant.