Mr. Jignesh of Delhi books accommodation, though an e-commerce operator Plan My Trip Ltd. (PMTL), registered under GST in Uttarakhand, in a newly…

As per section 22, every supplier of goods or services or both is required to obtain registration in the State/ Union territory from where he makes the taxable supply if his aggregate turnover exceeds threshold limit in a financial year. However, section 24, inter alia, provides that persons who supply goods or services or both through an electronic commerce operator (hereinafter referred as ECO), who is required to collect tax at source under section 52, are required to obtain registration mandatorily. However, said mandatory registration is not applicable, inter alia, to the suppliers of the services which are notified under section 9 (5) or section 5 (5) of the IGST Act, 2017; such suppliers are entitled for threshold exemption. In case where services are notified under section 5 (5) of the IGST Act, 2017, the ECO is liable to pay the entire tax on behalf of the suppliers of services. Notification No. 14/2017 IT (R) dated 28.06.2017 issued under said section notifies services by way of providing accommodation in hotels, provided the person supplying such service through ECO is not liable for registration under section 22 (1) , as one such service where the ECO is liable to pay tax on behalf of the suppliers. In the given case, PRL provides services by way of providing accommodation in hotel through an ECO. Services by way of providing accommodation in hotels provided by a supplier PRL - which is not liable for registration under section 22 (1) as its turnover is less than the threshold limit for registration, [viz.20 lakh], is a service notified under section 5 (5) . Thus, PRL will be entitled for threshold exemption for registration and will not be required to obtain registration even though it supplies services through ECO. As per section 52, ECO is not required to collect tax at source (TCS) in cases where the service is notified under section 9 (5) of the CGST Act, 2017/section 5 (5) of the IGST Act, 2017. The applicable tax on such services is to be paid by the ECO as if he is the supplier liable to pay tax on the supply of such services. Thus, in the given case, no tax is required to be collected at source under section 52. Further, the supply of accommodation services by PRL to Mr. Jignesh is an intra-State supply liable to CGST and SGST since the place of supply of services by way of lodging accommodation by a hotel is the location at which the immovable property is located in terms of section 12 (3) of the IGST Act, 2017. Accordingly, in the given case, place of supply is Uttarakhand and location of supplier PRL is also Uttarakhand. As discussed above, entire tax of 9,000 (each under CGST and SGST) on 1,00,000 will be paid by the ECO – PMTL. In case where PRL is registered under GST, service by way of providing accommodation in hotels provided by it through ECO will no longer be a service notified under section 5 (5) . The reason for the same is that services by way of providing accommodation in hotels are notified under section 5 (5) only where the person supplying such service through ECO is not liable for registration under section 22 (1) . Consequently, said services shall be subject to the TCS provisions under section 52. Further, in a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and the supplier-side ECO is himself the supplier of the said supply, Circular No. 194/06/2023 GST dated 17.07.2023 clarifies that the buyer-side ECO will be required to collect TCS, as applicable, pay the same to the Government in accordance with section 52 and also make other compliances under said section. As discussed above, the supply of accommodation services by PRL to Mr. Jignesh is an intra-State supply liable to CGST and SGST. Accordingly, in the given case, buyer side ECO – PMTL - is required to collect TCS on 1,00,000 @ 0.5% each under CGST and SGST as follows: = 1,00,000 × 0.5% = 500 each under CGST and SGST