TaxTMI 
TaxTMI 
2021 (12) TMI 1142
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....(hereinafter called the Applicant) arc registered under (GST with GSTIN 33AMCB0293L1ZL. The applicant has sought Advance Ruling on the following questions: 1. Supply of raw water falls under exempt goods under GST. Does raw water that is supplied through tankers through the Bookwater platform come under exempted goods as well? 2. Does the supplier of water through tankers come under supply of raw water or under transport services? 3. Does Bookwater have to withhold any tax (GST TCS 1% from the suppliers' before making payments for the supply of raw water through our platform? 4. Is the supplier making raw water sale is required to register under GST since they are transacting through an e-commerce operator? 5. Does Sewage Evacuation come under 18% GST? If yes, most individual sewage tanker operators have turnover less than 20Iakhs per annum. Since we are not billing the customer directly and are only billing on behalf of the supplier, will the exemption limit of Rs. 20 Lakhs per annum he applicable to suppliers individually? 6. Consequently, is GST Registration applicable for all suppliers through the Bookwater platform or only ....
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....€¢ The payment from customer is collected by BookWater on behalf of supplier. • Settlement is done to the supplier after deducting the online charges if any • Bookwater charges customer separate charges as convenience fee (with GST) • BookWaler's payment partners charge (convenience fee) 2.2 On interpretation law the applicant has referred to the definitions of Goods Sec 2(52); Services Sec 2(102); Electronic Commerce See 2(44); Electronic Commerce Operator Sec 2(45); Exempt Supply Sec 2(47); Tax Collected at source Sec 52 of the CGST Act 2017. They have also referred to Section 22. 23, 24 of CGST Act 2017 regarding GST registration. The applicant has submitted that under Section 24 of CGST Act 2017 clause ix and x states (ix) Persons who supply goods or services or both, other than supplies specified under sub section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52; (x) Every electronic commerce operator 'who is required to collect tax at source under section 52; In view of the above statutory provisions, the applicant has submitted that they are....
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....on 4 : As per section 23 of the CGST Act, 2017 any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act; Since the supply of raw water is an exempt supply of goods, the supplier making transactions through their digital platform is also not required to be registered under GST. Hence mandatory GST registration for supply of exempt goods through their digital platform is not applicable. • Question 5 : Any service not covered under notified rates of tax will be taxable at 18% GST on the value of services being rendered. Sewage Evacuation services are covered under the SAC (Service Accounting Code) - 099411 - Sewerage and sewage treatment services 999412 - Septic tank emptying and cleaning services Hence the suppliers already having GSTIN or is liable to get themselves registered under this Act is required to charge 18% on the value services rendered. Hence the rate of GST shall be at 18% by the supplier and with regard to the exemption limit applicability to suppliers individually, the Government vid....
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....usiness model with respect to both supply of raw water and sewage collection. They submitted that raw water being an exempt product under GST and supply of water is sale, should the supplies be registered, should TCS be withheld. For sewage, the suppliers who collect the sewage are all below 20 lakhs limit, should they be registered; should tax be collected. They submitted that they are operating on Amazon web services platform, located in India. The Payment is made to suppliers after withholding of 1% TCS for the services rendered by the applicant. The Member asked for the agreements with suppliers and invoice copies and the applicant agreed to furnish the same. 3.2 The applicant submitted the following documents on 07.10.2021 • Supplier agreement copy • Consumer payment policy • Consumer privacy policy • Consumer terms of use • Original invoice for water supply • Sample invoice for sewage evacuation 3.3 The applicant was issued with a letter dated 20.10.2021 informing the applicant that their supply involves extending web platform/mobile application to connect the service provider (sup....
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....bility to pay tax on their services and the same is a relevant question under 97(2)(c) of the Act. Moreover question 2 which pertains to whether supply or water through tankers comes under supply of raw water or transport services more so vide their platform, has a direct, bearing on the nature of their services, which is a relevant question under section 97(2)(a)the Act. • According to Section 52 of the Act, every electronic commerce operator, not being an agent, shall collect an amount calculated at such rate not exceeding one percent., as may, be notified by the Government on the recommendations of the Council, 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 operator (emphasis supplied).They are an electronic commerce operator as mentioned supra and the consideration with respect to supplies is also collected by them as per sec 52 of the Act furthermore as per the sec 52, an electronic commerce operator shall collect 1% (one percent) of the net value of taxable supplies. Also, the question raised by, them in the application was, whether TCS (Tax collected....
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....development, management and operation of a mobile application termed 'Hook Water Mobile Application' and a website at 'www.bookwater.com' for connecting suppliers of water and sewage tanker services to individuals or entities in need of the same. When a supplier of water or sewage tanker signs the 'Supplier agreement' with the applicant, they list and retain the supplier on board for a charge raised on such suppliers. The activity of the applicant is seen from the sample copies of the 'supplier agreements' is restricted to developing, managing and operating the platform and functioning, as a market place; collecting payments through its online payment mechanism to facilitate the transaction between the supplier and customer. Further, from the copies of Invoice furnished before us, it is seen that the invoice mentions the 'seller' as the 'supplier' and the details of such suppliers are mentioned apart from the Billing details. Delivery address and Tanker charges, Convenience Fees and Payment Gateway Service Charges are part of the bill charges raised by them. The applicant in their submissions has stated that they are raising the Invoice on behalf of the suppliers and they do not bi....
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....r platform has a direct bearing on the nature of their Services, which is a relevant question under Section 97(2)(a) • Also, in respect of Q. No. 3, TCS is applicable only on taxable supplies, therefore only if they know whether the supply made through their platform is a taxable supply or not the said TCS can be deducted by them from their suppliers and is a relevant question under Section 97(2)(c) of the Act • Since the aspect of registration under GST has an implication on the rates of services provided by their suppliers which in turn has a monetary implication on services provided by them, the same comes under the ambit of Section 97(2)(c) of the Act. • In so far ns questions 5, 6 and 7 are concerned, according to Section 97(2)(b) any applicant can seek an advance ruling from the Authority on the applicability of any notification issued under the Act. Notification No. 65/2017-CT dated 15.11.2017, amended vide Notification No. 06/2019-CT dated 29.01.2019 pertains to the exemption limit applicable to suppliers (Suppliers here, means the water tanker and sewage evacuation suppliers) individually, which has a direct implication on them as agg....
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.... Chapter shalt be binding only (a) on the applicant who had Sought it in respect of any matter referred to in sub section (2) of section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant 6.4 In the case at hand, the applicant is an e-commerce operator, who operates and manages a digital platform for the customers and the suppliers and do not undertake the sale of water or supply of services of sewage excavation, in relation to which the ruling is sought. The applicant has claimed that all the questions raised are eventually covered under 97(2)(c) of the GST Act which is 'Determination of the liability to pay tax on any goods or services or both' It is the contention that the applicant being an e-commerce operator, the collection of TCS depends on the 'net value of the taxable supplies made through it' as per Section 52 of the Act and therefore, the questions raised on the supplies made through the digital platform are admissible for ruling and has a direct implication to their supply. Section 52 of the Act, States as under: 52. (1) Notwithstanding anything to the contrary cont....
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.... or the service of Sewage evacuation service. Thus it is clear that the questions raised by the applicant, except for Q. No. 3 & 7, is not in relation to the supply of goods or services being undertaken or proposed to be undertaken by him. In this connection, we would also like to refer to the ruling of the TNAAAR, in the case of M/s. Erode Infrastructure, wherein, the Appellate authority, while considering the admissibility of the application, has stated as under: "14. The provisions of S.103 categorically states that the ruling pronounced is binding only on the appellant. It automatically flows that if a recipient obtains a ruling on the taxability of his inward supply of goods or services, the supplier of such goods or services is not bound by that ruling and he is free to assess the supply according to his own determination, in which case, the ruling loses its relevance and applicability even. Any law provision has to be interpreted in a constructive and harmonious way keeping in mind the object of the purpose of the provision. All parts of it should be read in aid of and not in derogation of that purpose. Any interpretation, if it defeats the very purpose of the objec....