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 𝗖𝗶𝗿𝗰𝘂𝗹𝗮𝗿 𝗡𝗼. 240/34/2024-𝗚𝗦𝗧 (𝗱𝗮𝘁𝗲𝗱 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. 🔑 𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀: 📌 𝗠𝗮𝗻𝗱𝗮𝘁𝗼𝗿𝘆 𝗖𝗮𝘀𝗵 𝗣𝗮𝘆𝗺𝗲𝗻𝘁: 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. 👉 Previously, this restriction applied only to restaurant services. Now, it extends to all ECOs. 📌 𝗥𝗲𝘀𝘁𝗿𝗶𝗰𝘁𝗶𝗼𝗻 𝗼𝗻 𝗜𝗧𝗖 𝗨....
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....0320;𝗮𝗴𝗲: Input Tax Credit (ITC) cannot be used to settle GST liability for supplies facilitated under Section 9(5). 📌 𝗜𝗧𝗖 𝗳𝗼𝗿 𝗢𝘄𝗻 𝗦𝘂𝗽𝗽𝗹𝗶𝗲𝘀: However, ITC can still be used for discharging GST liability on services directl....
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....y supplied by the ECO. 📊 𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝗘𝗖𝗢𝘀: * Significant shift for ECOs who previously used 𝗜𝗧𝗖 to discharge Section 9(5) liabilities. * May 𝗶𝗺𝗽𝗮𝗰𝘁 𝘄𝗼𝗿𝗸𝗶𝗻𝗴 𝗰....
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....𝗮𝗽𝗶𝘁𝗮𝗹 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 as payments will need to be made in cash rather than utilizing available credits. * 𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗰𝗼𝘀𝘁𝘀 may increase due to the higher ....
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....cash outflows required for GST payments. * Uncertainty remains about 𝗿𝗲𝘁𝗿𝗼𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲 𝗮𝗽𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻, as the circular doesn't explicitly clarify this point. * Since the restriction arises from a 𝗰&#....
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....120310;𝗿𝗰𝘂𝗹𝗮𝗿 (not an amendment in CGST Act), it could be legally challenged under 𝗦𝗲𝗰𝘁𝗶𝗼𝗻𝘀 9(5), 49, 𝗮𝗻𝗱 49𝗔 of the CGST Act.<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....