Whether liable to get registered as E-commerce Operator under GST or not?

[JIGAR SHAH]

Case:

Assessee is a company working as an intermediary between gym operator and customer. Assessee collects fees from the customer and pays to gym operator with which the company has tie-up.

For example:

Company has tie-up with 10 gyms. Company collects ₹ 8000 from customer as 1 year fees for gym. Customer goes to the suggested gym and company pays to the gym directly on behalf of the customer. However, Company is only liable to pay for the services consumed by the customer, like customer went to gym for only 2 months so even if the company has collected ₹ 8000 as yearly fees, company is liable to pay for 2 months only to the gym.

Issue:

Whether company is required to get registered as an E-Commerce operator? If registered as E-Commerce operator then what will be the liability to collect tax from gyms in case gyms are not registered under GST?

Kindly clarify the GST Registration requirement.

[KASTURI SETHI]

Your client's activity is not covered under the category,"Intermediary Services" as he retains amount in his pocket See the definition of intermediary provided under Section 2(13) of IGST Act which is extracted below:-

Section 2((13) “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.

So registration under the category of "E-Commerce Operator" is required. Collect GST from gyms and deposit with Govt.

Do not intermingle two services.

[JIGAR SHAH]

Thank You !

[HariKishan Bhonagiri]

How do u satisfy the definition of Sec 2(44),2(45) of CGST Act, 2017.

Is really chargeable U/s 9(5), if so only registration required as per sec 24. Please revise your query as well as reply given.

AI Summary

Company Must Register as E-Commerce Operator Under GST; Collect and Remit GST for Gym Services, Not Intermediary Services A company acts as an intermediary between gyms and customers, collecting fees from customers and paying gyms for the services used. The issue discussed is whether the company needs to register as an E-Commerce Operator under GST and the implications for tax collection if gyms are not GST-registered. One response clarified that the company's activities do not fall under 'Intermediary Services' as defined by the IGST Act, necessitating registration as an E-Commerce Operator. The company should collect and remit GST from gyms. Another response questioned the applicability of certain GST provisions and suggested revising the query.