AI Drafter 
TaxTMI 
TaxTMI 
2021 (9) TMI 1065
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....ure, it offers discounts to the customers 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. ....
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....ds as under: 24. Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered 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 fur....
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....ervice through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act. Explanation.- For the purposes of this notification,- (a) "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); (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 T....
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....is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and (ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply. (ix) 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 of....
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....ct of a supply. Similarly, the CESTAT in Ruchi Soya Industries ltd. vs. Commissioner of Customs, Central GST and Excise, Indore [TS-301-CESTAT-2021-ST] in context of service tax law, held that it is essential to establish the basic elements for levy of tax i.e. service provider, services receiver, payment of consideration from 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 s....
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....(2) of section 17 of the Central Goods and Services Tax Act, 2017 and the rules made thereunder. (xiii) Entry No.8(ii) is the 'specific entry' in so far as the transportation services is concerned, since it deploys words 'transport of passengers by radio taxi'. 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 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? Lia....