TaxTMI 
TaxTMI 
2025 (8) TMI 1288
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....Ahmedabad verifies the merchant details on telephone via the registered mobile number provided by merchant; • that during the phone call verification, applicant's team confirms business details of the respective merchant/s; that once a business is verified, a merchant can add his/her offer from the freedeem app by sending a mail to applicant's back-end team at Ahmedabad; • that generally on merchant's request, offers are created by applicant's back-end team and once the same is verified by the merchant, the same goes live on the freedeem app; that all operations are taken care of from the central office based at Ahmedabad location; • that the primary function is to enable the local businesses (merchants) to participate on the freedeem app without any upfront charges, by offering discounts / deals on their merchandise; • that freedeem app charges a success fee (commission) only if business is transacted through the app; • that the applicant is paying GST on the success fees @18%; • that consumers have to visit the store of the merchant physically and avail the offer as per the terms and conditions mentione....
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....e an option wherein customer pays offer value on the freedeem app and thereafter the applicant transfers the share to the merchant on the second day of such redemption. 5. The applicant further claims that merchants engaged in bakery products, saloons, beauty parlors, hotel and restaurants are registering themselves on the freedeem app and floating their scheme in the open market to attract business. 6. The applicant, thereafter relying on notification No. 17/2017-CT(R) dated 18.11.2017, as amended, has stated that in case of restaurant services, when supplied through ecommerce operator, GST is to be paid by ecommerce operator in terms of section 9(5), ibid; that the applicant further stated that they will not fall within the ambit of 9(5), owing to the following viz., • that a platform is provided to the merchants through the app; that this allows the end users to identify offers through which they can avail maximum benefit; • that the merchant ought to have given discount/offers to the end users after making live on app; • that the applicant is having full control over offer once it goes live; • that the applicant only rec....
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....i] sample copy of agreement made with customers; [ii] sample copy of tax invoice issued by restaurant to the customer; [iii] sample copy of the invoice raised by Zomato. 8.1 The agreement made with the customers, known as "Merchant Registration Form', contains the following viz., DEALS /OFFERS CREATION DETAILS: All created DEALS and OFFERS must be communicated to Freedeem from time to time through the merchant's official emall id only which Is mentioned in this registration form. FREEDEEM SERVICES: • The Merchant's Offers ("Offers") shall be featured on the Freedeem Platform (as well as their strategic partner application including all other platforms, if any) in accordance with the offer options as agreed to with the Merchant on its goods/services from time to time during the Term of the Agreement. • All Offers including but not limited to Exclusive offers and other offers if any, as well as Freedom Fees for the same can be agreed through emails from the registered email ID or by way of a separate Annexure to this form. • The Users shall aval the Offers by paying offers'/deals' value as prescrib....
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....t needs to verify the status of the payment/redemption of selected deals/offers from the App dashboard. 7. Merchant agrees that it shall comply with all applicable laws, ordinances, codes, and regulations. Further, merchant shall establish and maintain all proper records (particularly, but without limitation, accounting records) required by any law, code of practice of corporate policy applicable to it from time to time. 8. Freedeem will process the reimbursement of the merchant share on the basis of number of redemption done at the merchant's outlet/s as shown in the App dashboard. 9. In case of multiple franchisee outlets, it is required to mention all necessary details of each branch/outlet in the separate annexure along with the agreement to process for each outlets' registration on freederm app. *Note: Buy Now/Pay Bill payment method will be effective in your city/location from the date of email/what's app notification you will receive from the Freedeem Applicable Taxes: Taxes will be deducted from the collected offer value and submitted with Tax department as per the following Food & Beverages Categories: ....
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....in provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 10. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made during the course of personal hearing, additional written submissions and oral submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought. 11. Before dwelling on to the questions on which the applicant has sought ruling, it would be prudent to reproduce the relevant sections, notifications, etc. for ease of understanding viz., CENTRAL GOODS AND SERVICES TAX ACT, 2017 • Section 2. Definitions.- In this Act, unless the context otherwise requires,- (44) "electronic commerce" means the supply of goods or services or both, including digital products over digital or electronic network; (45) "electronic commerce operator" means any person who ow....
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....required to collect tax at source under section 52; ] (xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; [* * * * ] [(xia) every person supplying online money gaming from a place outside India to a person in India; and] (xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council. • Section 52. Collection of tax at source .- [relevant extract] (1) Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the "operator"), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., 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. Explanation.- For the purposes of this sub-section, the expression "net value of taxable supplies" shall mean the aggregat....
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....ay of house-keeping, such as plumbing, carpentering etc, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act.". Notification No. 17/2021-Central Tax (Rate) New Delhi, 18^th November, 2021. G.S.R ...... (E) .- In exercise of the powers conferred by sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments further to amend the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 17/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696(E) dated the 28th June, 2017, namely :- 1. In the notification,- (ii) after clause (iii), the following clause shall be inserted, namely:- "(Iv) supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises." 12. The facts of ....
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.....6 Further, as per entry 6 of Schedule III of CGST Act, an activity or transactions of actionable claims, other than specified actionable claims, is to be treated neither as a "supply of goods" nor as a "supply of services". Further as per section 2(102A) of CGST Act, specified actionable claim means the actionable claim involved in or by way of betting, casinos, gambling, horse racing, lottery or online money gaming. As vouchers are not covered under definition of specified actionable claim, it appears that they are covered in entry 6 of Schedule III of CGST Act as actionable claims, other than specified actionable claims. Therefore, it appears that even in such a case, transaction in vouchers would be treated neither as a "supply of goods" nor as a "supply of services". 3.7 Therefore, it is clarified that irrespective of whether voucher is covered as a pre-paid instrument recognized by RBI or not, the voucher is just an instrument which creates an obligation on the supplier to accept it as consideration or part consideration and the transactions in voucher themselves cannot be considered either as a supply of goods or as a supply of services. However, supply of underlyin....
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....ng purposes, |except where the person supplying such service through electronic commerce operator is liable for registration under section 22(1), ibid]; (iii) services by way of house-keeping, such as plumbing, carpentering etc, [except where the person supplying such service through electronic commerce operator is liable for registration under section 22(1), ibid]; iv) supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises. The applicant has stated that what he supplies is voucher/coupon. The applicant has vehemently stated that they are not providing food delivery services to the end users however, they accept payment on behalf of the merchants; that they make the payment on the second day of redemption to the merchants after deducting their commission for providing its services; that they take no responsibility for the supply of services as described on the freedeem app. Since, the applicant's service does not fall within the ambit of the aforementioned services, notified in terms of section 9(5), ibid, they are outside the scope of the said sub-section. 17. Moving on to the third ques....
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.... CTCS and 0.5% STCS for supply at state other than state of Gujarat as applicant is following centralized management & operation system? The first portion of the question as far as state wise registration is concerned, stands answered in the FAQ on TCS under GST issued by the Law Committee, GST Council, dated 28.09.2018, wherein under Sr. No. 8, it is clarified as follows: Sr.no. Question Answer 8 Whether e-Commerce operator is required to obtain registration in every State/UT in which suppliers listed on their e-commerce platform are located to undertake the necessary compliance as mandated under the law? As per the extant law, registration for TCS would be required in each State / UT as the obligation for collecting TCS would be there for every intra-State or inter-State supply. In order to facilitate the obtaining of registration in each State / UT, the e-commerce operator may declare the Head Office as its place of business for obtaining registration in that State / UT where it does not have physical presence. It may be noted that each State/UT has indicated one administrative jurisdiction where all e-commerce operators having business (but not having physical....