services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, 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.
This entry casts the responsibility of paying GST on electronic commerce operators (ECOs) like Airbnb, OYO, Booking.com , etc., when they facilitate booking of accommodation services provided by unregistered suppliers (i.e., those not liable for registration under Section 22(1)) As per Section 22(1) of the CGST Act :-
- A person is liable for registration if aggregate turnover exceeds Rs. 20 lakhs in a financial year (Rs. 10 lakhs for special category states).
- Accordingly, if the supplier of accommodation service is below this threshold, ECO becomes liable under Section 9(5).
- If the supplier crosses this threshold, even if not registered voluntarily, ECO is not liable-the supplier is expected to discharge GST liability.
This provision ensures that unregistered small accommodation providers, especially in the unorganised sector, do not escape the tax net when operating through digital platforms. Instead of requiring them to register, the law shifts the burden to large, well-resourced ECOs who act as intermediaries.
Booking via Airbnb - Unregistered Host :-
Ms. A books a homestay via Airbnb with Mr. X, whose turnover is Rs. 8 lakhs. Since Mr. X is not liable for registration under Section 22(1), Airbnb must pay GST under Section 9(5).
Booking via OYO - Registered Hotel :-
Ms. B books a room via OYO with Hotel Y, whose turnover is Rs. 35 lakhs. Since the hotel is liable for registration, Entry 2 does not apply, and OYO is not liable. The hotel must collect and pay GST under forward charge.
Club or Campsite Operator on Platform :-
Mr. C operates a campsite via an app and earns Rs. 15 lakhs annually. He is below the threshold. The app / platform (ECO) will pay GST on his behalf under RCM.