E-commerce operators are required to pay GST on certain specified services supplied through their platform as if they are the supplier of such services liable for payment of tax, as per section 9(5) of the Central Goods and Services Tax Act 2017. E-commerce operators are those who own, operate or manage digital or electronic facility or platform for supply of goods or services or both, including digital products over digital or electronic network.
The list of services covered under section 9(5) of the Central Goods and Services Tax Act 2017 are as under:
‘Radio taxi’ means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS).
‘Maxicab, motorcab, motor cycle, motor vehicle and omnibus’ shall have the same meanings as assigned to them respectively in clauses (22), (25), (27), (28) and (29) of section 2 of the Motor Vehicle Act, 1988 (59 of 1988).
Now the Central Government has included restaurant services under the ambit of section 9(5) of the Central Goods and Services Tax Act 2017 vide Notification No. 17/2021-Central Tax (Rate) dated 18 November 2021.
‘Specified premises’ means premises providing hotel accommodation service having declared tariff of any unit of accommodation above Rs. 7,500 per unit per day or equivalent.
‘Restaurant service’ means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied. (Notification No. 20/2019- Central Tax (Rate) dated 30t September 2019)
The notification will be effective from 1 January 2022.
As per the above notification, food tech companies like Zomato, Swiggy, Uber Eats, etc., will be required to pay GST on supply of restaurant services through their platform as if they are the supplier of such restaurant services. In such cases, restaurants are not required to charge GST.
Exception: The above provision is not applicable for the restaurant services provided by restaurants, eating joints, etc. located at the premises providing hotel accommodation services having declared tariff of any unit of accommodation above Rs. 7,500 per unit per day or equivalent.
Rate of GST: The rate of GST applicable for supply of restaurant service is 5% without input tax credit.