GST on Service by Electronic Commerce Operator

GST12/08/2023 Source: GST


Electronic Commerce Operator


Electronic Commerce Operator (ECO) is any person who owns/operates/manages an electronic platform or electronic facility for supply of goods/services/both. Sometimes, ECO itself supplies the goods or services or both through its electronic portal. However, many times, the products/services displayed on the electronic portal are actually supplied by some other person to the consumer. 

Unlike a dealer who deals in goods and or services and offers the same to his customers on a digital network, an ECO is a facilitator who plays the role of bringing the buyer and seller to a common platform.

When a consumer places an order for a particular product/ service on this electronic portal, the actual supplier supplies the selected product/ service to the consumer. The price/ consideration for the product/ service is collected by the ECO from the consumer and passed on to the actual supplier after the deduction of commission by the ECO.

Services when supplied through ECO liable to GST

Notification No. 17/2017 CT (R) dated 28.06.2017/ Notification No. 14/2017 IT (R) dated 28.06.2017 as amended has notified the following categories of services supplied through ECO for this purpose - 

(a) Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle.

(b) Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under section 22(1) of the CGST Act. 

(c) Services by way of house-keeping, such as plumbing, carpentering etc, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section 22(1) of the CGST Act.


Person liable to pay GST for above specified services when supplied through ECO

If the ECO is located in taxable territory. Person liable to pay tax is the ECO.
If the ECO does not have physical presence in the taxable territory. Person liable to pay tax is the person representing the ECO.
If the ECO has neither the physical presence nor any representative in the taxable territory. Person liable to pay tax is the person appointed by the ECO for the purpose of paying the tax.


Registration of Electronic Commerce Operator for GST

Section 24 (x) of the GST Act prescribes that an ECO shall have the obligation of obtaining mandatory registration in GST. This could imply that an ECO would be obligated to obtain registration in every state irrespective of the fact whether the ECO has taxable supplies in a state or irrespective of the fact that aggregate turnover of the ECO does not cross the prescribed threshold (Rs 20 lakhs in a financial year).

TCS by Electronic Commerce Operator

Every electronic commerce operator (ECO), not being an agent, shall collect TCS at such rate not exceeding 1% (0.5% CGST + 0.5% SGST), of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the ECO. The rate for TCS is 1% IGST for inter-state taxable supply.

Services exempted under GST

1 - Transportation of passengers by following specified modes of transport is also exempt:-

(a) Railways in a class other than first class or an air-conditioned coach.

(b) Metro, monorail or tramway.

(c) Inland waterways.

(d) Public transport, other than predominantly for tourism purpose, in a vessel between places located in India; and

(e) Metered cabs or auto rickshaws (including e-rickshaws)

2 - Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having value of supply of a unit of accommodation below or equal to 1,000 per day or equivalent

Meaning of various terms used in E-Commerce operators

Radio taxi: means a taxi including a radio cab, by whatever name called, which is in two- way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS).

Maxi cab: means any motor vehicle constructed or adapted to carry more than 6 passengers, but not more than 12 passengers, excluding the driver, for hire or reward.

(a) Motor cab: means any motor vehicle constructed or adapted to carry not more than 6 passengers excluding the driver for hire or reward.

(b) Motor car: means any motor vehicle other than a transport vehicle, omnibus, road-roller, tractor, motorcycle or invalid carriage.

E-rickshaw: means a special purpose battery powered vehicle of power not exceeding 4000 watts, having three wheels for carrying goods or passengers, as the case may be, for hire or reward, manufactured, constructed or adapted, equipped and maintained in accordance with such specifications, as may be prescribed in this behalf.