As per the recommendation in 45th GST Council meeting, ‘restaurant service’ has been notified under section 9(5) of the CGST Act, 2017. As a result, the e-commerce operators(ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January, 2022, through ECO.
Due to this change several representations have been made to the department requesting clarification regarding modalities of compliance of the GST laws in respect of supply of restaurant services through ECO. The department has come out with clarifications through Circular No. 167/23/2021-GST dated 17th December, 2021. We shall discuss few clarifications provided by the department in this article.
- Would ECOs have to still collect TCS in compliance with section 52 of the CGST Act, 2017?
As ‘restaurant service’ has been notified under section 9(5) of the CGST Act, 2017, the ECO shall be liable to pay GST on restaurant services provided through ECO, with effect from the 1st January, 2022. Accordingly, the ECOs will no longer be required to collect TCS and file GSTR 8 in respect of restaurant services on which it pays tax in terms of section 9(5).
On other goods or services supplied through ECO, which are not notified u/s 9(5), ECOs will continue to pay TCS in terms of section 52 of CGST Act, 2017 in the same manner at present.
2. Would the ECOs be liable to pay tax on supply of restaurant service made by unregistered business entities?
Yes. ECOs will be liable to pay GST on any restaurant service supplied through them including by an unregistered person.
3. Can ECO utilize its Input Tax Credit to pay tax w.r.t ‘restaurant service’ supplied through the ECO?
No, the liability of payment of tax by ECO as per section 9(5) shall be discharged in cash.
4. Who will issue invoice in respect of restaurant service supplied through ECO – whether by the restaurant or
by the ECO?
The invoice in respect of restaurant service supplied through ECO under section 9(5) will be issued by ECO.
5. Reporting of restaurant services, value and tax liability etc in the GST return.
e-commerce operators(ECO):
The ECO may, on services notified under section 9 (5) of the CGST Act,2017, including on restaurant service provided through ECO, may continue to pay GST by furnishing the details in GSTR 3B, reporting them as outward taxable supplies for the time being.
Besides, ECO may also, for the time being, furnish the details of such supplies of restaurant services under section 9(5) in Table 7A(1) or Table 4A of GSTR-1, as the case maybe, for accounting purpose.Registered persons supplying restaurant services through ECOs:
Registered persons supplying restaurant services through ECOs under section 9(5) will report such supplies of restaurant services made through ECOs in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B, for the time being.
Click here to view the circular issued by the department.
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