Circular No. 167/23/2021-GST [C10-5R8]

The GST Council in its 45th meeting held on 17th September, 2021 recommended to notify ‚Restaurant Service‛ under section 9(5) of the CGST Act, 2017. Accordingly, the tax on supplies of restaurant service supplied through e- commerce operators shall be paid by the e-commerce operator. In this regard notification No. 17/2021 dated 18.11.2021 has been issued.

2. Certain representations have been received requesting for clarification regarding modalities of compliance to the GST laws in respect of supply of restaurant service through e-commerce operators (ECO). Clarifications are as follows:

Sl Issue Clarification No

1. Would ECOs have to still As ‘restaurant service’ has been notified under collect TCS in compliance section 9(5) of the CGST Act, 2017, the ECO with section 52 of the CGST shall be liable to pay GST on restaurant Act, 2017? services provided, with effect from the 1st

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Circular No. 167 / 23 /2021 - GST

Sl Issue Clarification No January, 2022, through ECO. 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 ECOs have to As ECOs are already registered in accordance mandatorily take a separate with rule 8(in Form GST-REG 01) of the CGST registration w.r.t supply of Rules, 2017 (as a supplier of their own goods or restaurant service [notified services), there would be no mandatory under 9(5)] through them requirement of taking separate registration by even though they are ECOs for payment of tax on restaurant service registered to pay GST on under section 9(5) of the CGST Act, 2017. services on their own account?

3. Would the ECOs be liable to Yes. ECOs will be liable to pay GST on any pay tax on supply of restaurant service supplied through them restaurant service made by including by an unregistered person. unregistered business entities?

4. What would be the aggregate It is clarified that the aggregate turnover of turnover of person supplying person supplying restaurant service through ‘restaurant service’ through ECOs shall be computed as defined in section ECOs? 2(6) of the CGST Act, 2017 and shall include the aggregate value of supplies made by the restaurant through ECOs. Accordingly, for threshold consideration or any other purpose in the Act, the person providing restaurant service through ECO shall account such

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Circular No. 167 / 23 /2021 - GST

Sl Issue Clarification No services in his aggregate turnover.

5. Can the supplies of No. ECOs are not the recipient of restaurant restaurant service made service supplied through them. Since these are through ECOs be recorded not input services to ECO, these are not to be as inward supply of ECOs reported as inward supply (liable to reverse (liable to reverse charge) in charge). GSTR 3B?

6. Would ECOs be liable to ECOs provide their own services as an reverse proportional input electronic platform and an intermediary for tax credit on his input goods which it would acquire inputs/input service on and services for the reason which ECOs avail input tax credit (ITC). The that input tax credit is not ECO charges commission/fee etc. for the admissible on ‘restaurant services it provides. The ITC is utilised by ECO service’? for payment of GST on services provided by ECO on its own account (say, to a restaurant). The situation in this regard remains unchanged even after ECO is made liable to pay tax on restaurant service. ECO would be eligible to ITC as before. Accordingly, it is clarified that ECO shall not be required to reverse ITC on account of restaurant services on which it pays GST in terms of section 9(5) of the Act. It may also be noted that on restaurant service, ECO shall pay the entire GST liability in cash (No ITC could be utilised for payment of GST on restaurant service supplied through ECO)

7. Can ECO utilize its Input Tax No. As stated above, the liability of payment of Credit to pay tax w.r.t tax by ECO as per section 9(5) shall be ‘restaurant service’ supplied discharged in cash. through the ECO?

8. Would supply of goods or ECO is required to pay GST on services services other than notified under section 9(5), besides the

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Circular No. 167 / 23 /2021 - GST

Sl Issue Clarification No ‘restaurant service’ through services/other supplies made on his own ECOs be taxed at 5% without account. ITC? On any supply that is not notified under section 9(5), that is supplied by a person through ECO, the liability to pay GST continues on such supplier and ECO shall continue to pay TCS on such supplies. Thus, present dispensation continues for ECO, on supplies other than restaurant services. On such supplies (other than restaurant services made through ECO) GST will continue to be billed, collected and deposited in the same manner as is being done at present. ECO will deposit TCS on such supplies.

9. Would ‘restaurant service’ Considering that liability to pay GST on and goods or services other supplies other than ‘restaurant service’ through than restaurant service sold the ECO, and other compliances under the Act, by a restaurant to a customer including issuance of invoice to customer, under the same order be continues to lie with the respective suppliers billed differently? Who shall (and ECOs being liable only to collect tax at be liable for raising invoices source (TCS) on such supplies), it is advisable in such cases? that ECO raises separate bill on restaurant service in such cases where ECO provides other supplies to a customer under the same order.

10. Who will issue invoice in The invoice in respect of restaurant service respect of restaurant service supplied through ECO under section 9(5) will supplied through ECO - be issued by ECO. whether by the restaurant or by the ECO?

11. Clarification may be issued A number of other services are already notified as regard reporting of under section 9(5). In respect of such services, restaurant services, value and ECO operators are presently paying GST by tax liability etc in the furnishing details in GSTR 3B. GST return. The ECO may, on services notified under

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Circular No. 167 / 23 /2021 - GST

Sl Issue Clarification No 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 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.

3. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.