GST Circular: ECOs Must Pay GST Liability Under Section 9(5) in Cash

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....ST Circular: ECOs Must Pay GST Liability Under Section 9(5) in Cash<br>By: - Pradeep Reddy<br>Goods and Services Tax - GST<br>Dated:- 15-2-2025<br>CBIC has issued &#120278;&#120310;&#120319;&#120304;&#120322;&#120313;&#120302;&#120319; &#120289;&#120316;. 240/34/2024-&#120282;&#120294;&#120295; (&#120305;&#120302;&#120321;&#120306;&#120305; 31.12.2024), introducing a significant update for e-comme....

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....rce operators (ECOs) paying GST under Section 9(5) of the CGST Act. &#128273; &#120286;&#120306;&#120326; &#120283;&#120310;&#120308;&#120309;&#120313;&#120310;&#120308;&#120309;&#120321;&#120320;: &#128204; &#120288;&#120302;&#120315;&#120305;&#120302;&#120321;&#120316;&#120319;&#120326; &#120278;&#120302;&#120320;&#120309; &#120291;&#120302;&#120326;&#120314;&#120306;&#120315;&#120321;:&nbsp;E....

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....COs must now pay the entire GST liability for supplies covered under Section 9(5) using their electronic cash ledger only. &#128073; Previously, this restriction applied only to restaurant services. Now, it extends to all ECOs. &#128204; &#120293;&#120306;&#120320;&#120321;&#120319;&#120310;&#120304;&#120321;&#120310;&#120316;&#120315; &#120316;&#120315; &#120284;&#120295;&#120278; &#120296;&#12....

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....0320;&#120302;&#120308;&#120306;:&nbsp;Input Tax Credit (ITC) cannot be used to settle GST liability for supplies facilitated under Section 9(5). &#128204; &#120284;&#120295;&#120278; &#120307;&#120316;&#120319; &#120290;&#120324;&#120315; &#120294;&#120322;&#120317;&#120317;&#120313;&#120310;&#120306;&#120320;:&nbsp;However, ITC can still be used for discharging GST liability on services directl....

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....y supplied by the ECO. &#128202; &#120284;&#120314;&#120317;&#120302;&#120304;&#120321; &#120316;&#120315; &#120280;&#120278;&#120290;&#120320;: * Significant shift for ECOs who previously used &#120284;&#120295;&#120278; to discharge Section 9(5) liabilities. * May &#120310;&#120314;&#120317;&#120302;&#120304;&#120321; &#120324;&#120316;&#120319;&#120312;&#120310;&#120315;&#120308; &#120304;....

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....&#120302;&#120317;&#120310;&#120321;&#120302;&#120313; &#120319;&#120306;&#120318;&#120322;&#120310;&#120319;&#120306;&#120314;&#120306;&#120315;&#120321;&#120320; as payments will need to be made in cash rather than utilizing available credits. * &#120284;&#120315;&#120321;&#120306;&#120319;&#120306;&#120320;&#120321; &#120304;&#120316;&#120320;&#120321;&#120320; may increase due to the higher ....

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....cash outflows required for GST payments. * Uncertainty remains about &#120319;&#120306;&#120321;&#120319;&#120316;&#120320;&#120317;&#120306;&#120304;&#120321;&#120310;&#120323;&#120306; &#120302;&#120317;&#120317;&#120313;&#120310;&#120304;&#120302;&#120321;&#120310;&#120316;&#120315;, as the circular doesn&#39;t explicitly clarify this point. * Since the restriction arises from a &#120304;&#....

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....120310;&#120319;&#120304;&#120322;&#120313;&#120302;&#120319; (not an amendment in CGST Act), it could be legally challenged under &#120294;&#120306;&#120304;&#120321;&#120310;&#120316;&#120315;&#120320; 9(5), 49, &#120302;&#120315;&#120305; 49&#120276; of the CGST Act.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....