Supply through E - Commerce

[Kaustubh Karandikar]

When restaurant supply is through e -commerce (ECO), the restaurant will issue Bill of Supply without charging GST to ECO. This will be treated as ‘Nil’ rated, ‘Exempted’, ‘Non – GST’ or any other category of supply?

[Rajagopalan Ranganathan]

Sir,

According to Sl. No. 1 of the table appended to Circular No. 167/23/2021-GST dated 17.12.2021 issued by CBIC, "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). Therefore GST on the supply of eatables by a restaurant through ECO the liability to pay GST is on ECO. Therefore the restaurant supplying eatables will be treated as exempted supply in the hands of the restaurant.

[Shilpi Jain]

In my view, this will still be a taxable supply since tax is being paid on it and exempt supply def does not include supplies on which gst is paid under section 9(5)

[Shilpi Jain]

Pls also glance through my article relating to this

https://www.taxtmi.com/article/detailed?id=10158

[Shilpi Jain]

Also, circulars are not law. Things mentioned in the circular should be tested in the background of the law and then followed.

These days circulars are majorly not in line with law, they don't mention the legal backing for any clarification and are issued with revenue bias

AI Summary

GST liability on e commerce restaurant services shifts to the e commerce operator, impacting restaurants' GST charging obligations.
Circular No.167/23/2021 GST allocates GST liability for notified restaurant services supplied through e commerce to the e commerce operator, requiring restaurants to issue a bill of supply without charging GST; ECOs paying tax on such supplies are exempted from collecting TCS and filing GSTR 8 for those supplies, though commentators dispute whether such supplies remain taxable rather than exempt and caution that circulars must be tested against statutory law.