Q. 52 Recently we see Swiggy etc ded GST TDS on payments made to service providers (collected from people who place order with restaurants or hotels) namely hotels and restaurants U/S 9(5)….what is this provision?

Ans. There are certain services notified by the government under Section 9(5) of the CGST Act, 2017 on which tax shall be paid by the electronic commerce operator. In other words, if the services are rendered by the service provider through the electronic commerce operator in that case liability to pay tax is on the electronic commerce operator. No TCS shall be collected by the electronic commerce operator if the service is covered under Section 9(5) of the CGST Act, 2017.

Whereas as per Section 52 of the CGST Act, 2017, 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.

Therefore, every electronic commerce operator shall collect TCS from the supplier of goods or service at the rate of 1% CGST/SGST on value of goods and services except in case services are covered under Section 9(5) of the CGST Act, 2017.

Q.51 Whether a supplier who opted for composition scheme under GST also lible to pay tax on non taxable supplies by him ?

Ans. As per the provisions of Section 10(2) of the CGST Act'2017,

The registered person shall be eligible to opt under sub-section (1), if:-

(a)…….

(b) he is not engaged in making any supply of goods [or services])which are not leviable to tax under this Act;

Therefore, as reproduced above, the registered person shall not be eligible to opt for composition scheme.

Q.50 Under Composition scheme u/s 10 is there any restrictions on purchase from unregistered persons or availing services other than those falling under reverse charge u/s 9(3) & 9 (4) ? 

Ans. As per the provisions of Section 10(4) of the CGST Act'2017, 

“A registered person who opts to pay tax under section 10 shall not collect any tax from the recipient on supplies made by him and will also not be entitled to credit of input tax”. 

Thus, since the registered person is not entitled to input tax, he can purchase from an unregistered person also.