GST on service supplied by restaurants through e-commerce operators
– Board Clarifications
[Circular No. 167 / 23 /2021 – GST dated 17
December 2021]
Sub: GST on service supplied by restaurants through e-commerce operators.
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
No |
Issue |
Clarification |
|
1. |
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,
with effect from the 1st 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 mandatorily take a separate registration w.r.t supply of
restaurant service [notified under 9(5)] through them even though they are
registered to pay GST on services on their own account? |
As
ECOs are already registered in accordance with rule 8(in Form GST-REG 01) of
the CGST Rules, 2017 (as a supplier of their own goods or services), there
would be no mandatory requirement of taking separate registration by ECOs for
payment of tax on restaurant service under section 9(5) of the CGST Act,
2017. |
|
3. |
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. |
|
4. |
What
would be the aggregate turnover of person supplying ‘restaurant service’
through ECOs? |
It
is clarified that the aggregate turnover of person supplying restaurant
service through ECOs shall be computed as defined in section 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 services in his aggregate turnover. |
|
5. |
Can
the supplies of restaurant service made through ECOs be recorded as inward
supply of ECOs (liable to reverse charge) in GSTR 3B? |
No.
ECOs are not the recipient of restaurant service supplied through them. Since
these are not input services to ECO, these are not to be reported as inward
supply (liable to reverse charge). |
|
6. |
Would
ECOs be liable to reverse proportional input tax credit on his input goods
and services for the reason that input tax credit is not admissible on
‘restaurant service’? |
ECOs
provide their own services as an electronic platform and an intermediary for
which it would acquire inputs/input service on which ECOs avail input tax
credit (ITC). The ECO charges commission/fee etc. for the services it
provides. The ITC is utilised by ECO 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 Credit to pay tax w.r.t ‘restaurant service’
supplied through the ECO? |
No.
As stated above, the liability of payment of tax by ECO as per section 9(5)
shall be discharged in cash. |
|
8. |
Would
supply of goods or services other than ‘restaurant service’ through ECOs be
taxed at 5% without ITC? |
ECO
is required to pay GST on services notified under section 9(5), besides the
services/other supplies made on his own account. 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’ and goods or services other than restaurant service sold
by a restaurant to a customer under the same order be billed differently? Who
shall be liable for raising invoices in such cases? |
Considering
that liability to pay GST on supplies other than ‘restaurant service’ through
the ECO, and other compliances under the Act, including issuance of invoice
to customer, continues to lie with the respective suppliers (and ECOs being
liable only to collect tax at source (TCS) on such supplies), it is advisable
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 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. |
|
11. |
Clarification
may be issued as regard reporting of restaurant services, value and tax
liability etc in the GST return. |
A
number of other services are already notified under section 9(5). In respect
of such services, ECO operators are presently paying GST by furnishing
details in GSTR 3B. 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 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.
CBIC-190354/207/2021-TRU
Section-CBEC