Electronic Commerce Operator- Section 9(5) vs Section 52
Meaning of Electronic Commerce Operator- As per Section 2(45) of the CGST Act, 2017,
Hence, operators like OLA, UBER, Swiggy, Zomato, Amazon, Flipkart etc are considered as Electronic Commerce Operators who facilitates supply of goods or services through their electronic platform. The electronic commerce operator himself does not make any supply but rather facilitates supply between supplier and recipient. We need to have detailed understanding of some of the provisions of GST law to have a clear idea about GST on suppliers through ECO.
Registration requirement :-
As per clause (ix) of section 24, a person who makes supplies through ECO who is required to collect tax under section 52 is required to compulsorily take registration irrespective of his turnover. However if a person makes supplies which are covered under section 9(5), then to him this clause is not applicable. Hence. For such supplier whose supplies are covered under section 9(5), compulsory registration under section 24 is not applicable.
Further, as per clause (iv) of section 24, a person who is required to pay tax under section 9(5) is required to take compulsory registration irrespective of his turnover.
Furthermore, as per clause (x) of section 24 an Electronic commerce operator who is required to collect tax under section 24 is required to take compulsory registration irrespective of turnover.
Following table shall summarise the registration provisions for the supplier and ECO.
Supplier supplying through ECO liable to collect TCS
Compulsory registration required
Supplier supplying notified services under Sec. 9(5)
Exempted from compulsory registration
ECO liable to pay tax under Sec. 9(5)
ECO must register, supplier may not need to
get registered.
ECO liable to collect TCS under Sec. 52
It is also required to be noted that a person supplying goods through ECO can apply for registration under composition scheme under section 10.
Section 52 vs Section 9(5) for ECO
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.
This is intended to track and capture the tax on supplies made by third- party vendors through ECOs, such as Flipkart, Amazon, Zomato, etc., where the ECO merely facilitates the transaction and collects payment on behalf of the actual supplier.
For the purposes of this sub-section, the expression "net value of taxable supplies" shall mean the aggregate value of taxable supplies of goods or services or both, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.
This makes it explicitly clear that services notified under Section 9(5) are excluded from the purview of Section 52.
In contrast, Section 9(5) deals with specific notified categories of services, where the ECO is made deemed supplier and directly liable to pay GST.
Such services include :-
- Passenger transportation services (e.g., Uber, Ola)
- Hotel accommodation services (e.g., Oyo, MakeMyTrip for unregistered hotels)
- Housekeeping services
- Restaurant services (subject to conditions)
In such cases, the ECO itself pays the tax under forward charge, and the actual service provider is not treated as the supplier for tax purposes.
The legislative intent is clear- If a supply is covered under Section 9(5), then Section 52 will not apply.
- In cases where Section 9(5) is applicable, the ECO is not required to collect TCS because it is directly liable to pay GST as the supplier.
- Conversely, where a supply is not covered under Section 9(5) but is made through an ECO, and the ECO collects consideration, TCS under Section 52 applies.
This ensures no dual compliance (i.e., no scenario where both RCM liability and TCS obligations co-exist for the same supply), which supports administrative simplicity and avoids interpretational conflict.
- A business supplying restaurant services through Swiggy: If the restaurant is not located in a specified premise, the service may be notified under Section 9(5), and Swiggy would be liable to pay GST. No TCS is required.
- A business selling apparel via Amazon: This is not notified under Section 9(5). Hence, Amazon would be liable to collect TCS under Section 52 on behalf of the seller.
Sections 9(5) and 52 operate in two distinct domains :-
- Section 9(5) deals with liability to pay tax (by ECO as deemed supplier).
- Section 52 deals with tax collection and reporting on behalf of actual suppliers.
Where a supply is notified under Section 9(5), Section 52 does not apply. Thus, these two sections are mutually exclusive, and care must be taken to assess the correct provision applicable to each transaction routed through an ECO.
Deeming provision - ECO treated as the supplier for certain services
Collection provision - ECO collects tax on behalf of suppliers
Applies to specific notified services (e.g., transport, hotel booking, etc.)
Applies to all taxable supplies made through ECO (except 9(5) services)
ECO pays GST on behalf of actual supplier under forward charge
Supplier pays GST, ECO collects TCS at 1% and remits it
Deemed supplier for tax purposes
Pure facilitator collecting consideration and TCS
Supplier is not liable for GST
Supplier is liable to pay GST
TCS Obligation under
Section 52
Not applicable - exempted via explanation to
Section 52(1)
Applicable - ECO must collect TCS and
file returns
Registration Requirement for Supplier
Not mandatory solely due to supplies via ECO
(per Section 24(ix) proviso)
Mandatory registration, irrespective of turnover (per Section 24(ix))
Compulsory registration under Section 24(iv)
Compulsory registration under Section 24(x)
Uber (transport), OYO (for unregistered hotels),
Housekeeping on Urban Clap
Amazon, Flipkart, Swiggy (for non-restaurant
goods supply)
Supplier issues tax invoice, ECO shows TCS deduction separately