Previously, restaurants were responsible for paying GST on services provided through E-Commerce Operators (ECOs). However, starting from January 1, 2022, the GST Council has expanded the scope of section 9(5) to include restaurant services. Under this new provision, GST on restaurant services supplied through ECOs is to be paid by the ECO in cash at a rate of 5%, and no Input Tax Credit (ITC) can be utilized on such supplies, regardless of whether the restaurant is registered for GST or not.
However, ECO shall not require to reverse ITC on account of restaurant services supplied through it as ECO provides their own service as an electronic platform and intermediary. Also, the ECOs are no longer required to collect TCS and file GSTR-8 in respect of these restaurant services.
Registered persons supplying restaurant services through ECOs under section9(5) will report such supplies of restaurant services made through ECOs in Table 8 of GSTR-1 to get automatically reflected in Table 3.1(c) of GSTR-3B as per circular no. 167/23/2021.
Further, as per notification no. 14/2022 new table 3.1.1 was inserted in GSTR-3B which was available from 1 August,2022 where in both ECO and registered restaurant can report these supplies. Accordingly, these values must be deleted from Table 3.1(c) of GSTR-3B and have to report the same in Table 3.1.1(ii).
The table format of 3.1.1 newly inserted is given below for your reference:
The format of the newly inserted Table 3.1.1 is provided in the following link: Table Format.
Hence, in the above attached table ECO shall furnish taxable supplies in (i) part on which that ECO is liable to pay tax under section 9(5) of the said act, further in part (ii) Registered person shall furnish those taxable supplies on which ECO is liable to pay tax under section 9(5) of the said act.
Conclusion
These recent changes in GST reporting for restaurant services through ECOs are aimed at streamlining the process and ensuring that the correct entities are responsible for tax payment and reporting. It’s important for both ECOs and registered restaurants to understand and comply with these regulations to avoid any potential issues with GST compliance.
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