M3M Pvt. Ltd., Pune, Maharashtra, provides house-keeping services. The company supplies its services exclusively through an e-commerce website owned…

As per section 22 of the CGST Act, 2017, 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 of the CGST Act, 2017 enlists certain categories of persons who are mandatorily required to obtain registration, irrespective of their turnover. Persons who supply goods or services or both through such electronic commerce operator (ECO), who is required to collect tax at source under section 52 of the CGST Act, 2017, is one such person specified under clause (ix) of section 24 of the CGST Act, 2017. However, where the ECO is liable to pay tax on behalf of the suppliers of services under a notification issued under section 9 (5) of the CGST Act, 2017, the suppliers of such services are entitled for threshold exemption. Section 2 (45) defines ECO as any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. Electronic commerce is defined under section 2 (44) of the CGST Act, 2017 to mean the supply of goods or services or both, including digital products over digital or electronic network. Since Fortech India Pvt. Ltd. owns and manages a website for e-commerce where both goods and services are supplied, it will be classified as an ECO under section 2 (45) of the CGST Act, 2017. Notification No. 17/2017 CT (R) dated 28.06.2017 issued under section 9 (5) of the CGST Act, 2017 specifies services by way of house-keeping, except where the person supplying such service through ECO is liable for registration under section 22 (1) of the CGST Act, 2017, as one such service where the ECO is liable to pay tax on behalf of the suppliers. In the given case, M3M India Pvt. Ltd. provides house-keeping services through an ECO. It is presumed that Hi-Tech Indya is an ECO which is required to collect tax at source under section 52 of the CGST Act, 2017. However, house-keeping services provided by M3M India Pvt. Ltd., which is not liable for registration under section 22 (1) as its turnover is less than 20lakh, is a service notified under section 9 (5) of the CGST Act, 2017. Thus, M3M India Pvt. Ltd. will be entitled for threshold exemption for registration and will not be required to obtain registration even though it supplies services through ECO. In the second case, M3M India Pvt. Ltd. sells readymade garments through ECO. Such supply cannot be notified under section 9 (5) of the CGST Act, 2017 as only supplies of services are notified under that section. Therefore, in the second case, M3M India Pvt. Ltd. will not be entitled for threshold exemption and will have to compulsorily obtain registration in terms of section 24 (ix) of the CGST Act, 2017.