TaxTMI 
TaxTMI 
2021 (9) TMI 1065
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.... for the passenger transportation service(cab service) provided by the drivers and the consideration charged and collected by Gensol from the customer is after deducting such discount amount; that an amount equivalent to the discount offered to customer is contributed out of the applicant's pocket and this discount is recorded as a 'marketing expenditure' in the books of account of the applicant; that the applicant will charge an amount towards commission by issuing a tax invoice on the Drivers for providing a digital platform in order to get connected with the potential customers; that the applicant will remit an amount to the Driver towards passenger transportation service provided by reducing an amount recoverable from the Drivers towards commission. The applicant has enclosed a copy of Draft Agreement between them and the Drivers (T&C). The applicant has cited the following example: 3. The applicant has submitted that the key steps involved in the process of booking of cab, invoicing and collection of consideration are set out as follows: a) Customer uses the electronic/digital platform of the applicant to book a cab. b) The digital platform connects the customer with cabs....
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....red under this Act,-- (iv) person who are required to pay tax under sub-section (5) of section 9; In the instant case, the applicant being the person required to discharge the amount of tax under subsection (5) of Section 9 of this Act needs to obtain compulsory GST registration. For Question 2: (iv) The levy of GST is under Section 9(1) of the CGST Act, on all intra-state supply and under Section 5(1) of the IGST Act, 2017 on all inter-state supply of goods or services or both. The scope of the term supply is contained in Section 7 of the CGST Act. In Section 7(1) of the CGST Act, 'supply' has been defined to include all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Given this statutory framework, the sine qua non for the levy of GST is as under: a. Supply of goods or services. b. That is made in the course or furtherance of business. c. Which is for a consideration. (v) Section 9(5) of the CGST Act, 2017 reads as under: (5) The Government may, on the recommendations of the Council, by notifica....
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....i 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); (vii) In the present case, the applicant thus steps into the shoes of the 'supplier' of service i.e. Driver/s therefore, the liability to raise invoice, collect the consideration, discharge GST, file the GST returns etc. is legally cast on the applicant. Accordingly, the applicant is liable to pay tax on the transaction value of transportation service in terms of Section 15(1) of the CGST Act. The GST is to be applied and remitted to the exchequer on the taxable value after discount and so, the applicant is to pay GST on the amount charged to customer (service recipient), which is the consideration and is paid by the service recipient. Section 9(5) of the CGST Act read with Notification No.17/2017-Central Tax (Rate) dated 28-6-2017 in very clear terms state that where transportation services are supplied through an electronic commerce operator, then all the provisions of the CGST Act shall apply to such electronic commerce operator as if he is the supplier li....
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....Upon referring to subsection (1) of above section, it categorically states that transaction value shall be the value of supply on which tax be leviable in terms of Section 9(1) of the CGST Act, 2017. Given the above statutory provision, GST is not applicable on the value of discount, which is recorded in and depicted on the invoice, provided by the supplier at the time of supply. In this context, GST flyer dated 1-1-2018 issued by the Central Board of Indirect Taxes and Customs (CBIC) clarifies that discount such as trade discount, quantity discount etc. are part of the normal trade and commerce, therefore pre-supply discounts i.e. discounts recorded in the invoice have been allowed to be excluded while determining the taxable value. In the current scenario, the applicant being classified as supplier of services in reference to Section 9(5) of the CGST Act, 2017 intends to offer discount at the time of supply of services on the ride charges to the customers. Hence the applicant stands liable to pay the amount of tax on the value of supply determined by Section 15(1) & 3(a) of CGST Act, 2017 which shall be net of ride charges. (x) Moreover, on perusal of sub-section (3) of above se....
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....service recipient to service provider, services etc. In the absence of services, the relationship of service provider and recipient, tax cannot be applied and levied. For Question-4: (xii) Relevant portion of Notification No.11/2017-Central Tax (Rate) dated 28-6-2017 reads as under: In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:- Sl.No. Chapter Description of Service Rate Condition 8. Heading 9964 (Passenger transport service) (ii) Tran....
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....ed for tracking using GPS or GPRS. Entry 8(ii) and 8(vi) (for 5% and 12%) are competing entries as description of service for entry 8(vi), which deploys words 'by a motor vehicle' includes radio taxi. The applicant is of the view that the rate of tax on services supplied through electronic commerce operator shall be leviable @5% (CGST - 2.5%, SGST - 2.5%) and Service Accounting Code shall be 996412-Taxi services including radio taxi and other similar services. (xiv) On the basis of fact, legal provision and notifications, the summary of the applicant's interpretation to the aforesaid questions are as under: Q.No. Question Applicant's view 1. Whether the applicant is liable to be registered and classified under the Category of E-Commerce Operator? Liable to be registered in view of Section 24(iv) of CGST Act, 2017. 2. Whether the applicant is liable to pay or discharge Goods & Service Tax (GST) in accordance to Section 9(5) of the CGST Act, 2017" Liable to pay GST as if he is the supplier of service i.e. passenger transportation services. 3. If answer to Q 2 is yes, what shall be the value of supply for passenger transportation service on which Goods and Service Tax (GST....