This article intents to discuss the applicability of GST on Non-refundable Registration Fee (NRF) collected by the organiser at the time of e-auction
What is E-auction?
E-auctions means that requirement for procurement of goods or services will be done online. All the process related to tendering (application, payment of fees, submission of bid, etc.) is done online (using computer & internet), and after tendering process successful bidder need to comply for additional documentation requirement.
Whether E-auction is to be considered as Supply of Goods or Supply of Services?
Section 2(56) of the CGST Act, 2017 provides that – ‘goods ‘ means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.
Section 2(12) of the CGST Act, 2017, “services”, means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.
Further, IGST Act has defined Online Information and Data Access or Retrieval Services to include different services, in Section 2(17) of the IGST Act which is reproduced as under:-
“online information and database access or retrieval services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,-
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;
(iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;
(v) online supplies of digital content (movies, television shows, music and the like);
(vi) digital data storage; and
(vii) online gaming”
From the above definitions it is correct to derive that E-auctions does not satisfy the definition of ‘goods’. Additionally ,it is also correct to say that E-auctions (which is intangible) is delivered through telecommunication network or internet. Thus, the intention of the legislature is very clear, to treat such activities as supply of services.
Therefore, GST shall be levied on Non-refundable Registration Fee collected for providing the above E-Auction services.