Circular No. 167 / 23 /2021 - GST
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CBIC-190354/207/2021-TRU Section-CBEC
Government of India
Ministry of Finance
Department of Revenue
****
North Block, New Delhi,
Dated the 17
th
December, 2021
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal
Commissioners/ Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (All)
Madam/Sir,
Sub: GST on service supplied by restaurants through e-commerce operators
–reg.
The GST Council in its 45
th
meeting held on 17
th
September, 2021 recommended
to notify ‚Restaurant Service‛ under section 9(5) of the CGST Act, 2017. Accordingly,
the tax on supplies of restaurant service supplied through e- commerce operators shall
be paid by the e-commerce operator. In this regard notification No. 17/2021 dated
18.11.2021 has been issued.
2. Certain representations have been received requesting for clarification
regarding modalities of compliance to the GST laws in respect of supply of restaurant
service through e-commerce operators (ECO). Clarifications are as follows:
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1. Would ECOs have to still
collect TCS in compliance
with section 52 of the CGST
Act, 2017?
As ‘restaurant service’ has been notified under
section 9(5) of the CGST Act, 2017, the ECO
shall be liable to pay GST on restaurant
services provided, with effect from the 1
st
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January, 2022, through ECO. Accordingly, the
ECOs will no longer be required to collect TCS
and file GSTR 8 in respect of restaurant services
on which it pays tax in terms of section 9(5).
On other goods or services supplied through
ECO, which are not notified u/s 9(5), ECOs will
continue to pay TCS in terms of section 52 of
CGST Act, 2017 in the same manner at
present.
2. Would ECOs have to
mandatorily take a separate
registration w.r.t supply of
restaurant service [notified
under 9(5)] through them
even though they are
registered to pay GST on
services on their own
account?
As ECOs are already registered in accordance
with rule 8(in Form GST-REG 01) of the CGST
Rules, 2017 (as a supplier of their own goods or
services), there would be no mandatory
requirement of taking separate registration by
ECOs for payment of tax on restaurant service
under section 9(5) of the CGST Act, 2017.
3. Would the ECOs be liable to
pay tax on supply of
restaurant service made by
unregistered business
entities?
Yes. ECOs will be liable to pay GST on any
restaurant service supplied through them
including by an unregistered person.
4. What would be the aggregate
turnover of person supplying
‘restaurant service’ through
ECOs?
It is clarified that the aggregate turnover of
person supplying restaurant service through
ECOs shall be computed as defined in section
2(6) of the CGST Act, 2017 and shall include
the aggregate value of supplies made by the
restaurant through ECOs. Accordingly, for
threshold consideration or any other purpose in
the Act, the person providing restaurant
service through ECO shall account such
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services in his aggregate turnover.
5. Can the supplies of
restaurant service made
through ECOs be recorded
as inward supply of ECOs
(liable to reverse charge) in
GSTR 3B?
No. ECOs are not the recipient of restaurant
service supplied through them. Since these are
not input services to ECO, these are not to be
reported as inward supply (liable to reverse
charge).
6. Would ECOs be liable to
reverse proportional input
tax credit on his input goods
and services for the reason
that input tax credit is not
admissible on ‘restaurant
service’?
ECOs provide their own services as an
electronic platform and an intermediary for
which it would acquire inputs/input service on
which ECOs avail input tax credit (ITC). The
ECO charges commission/fee etc. for the
services it provides. The ITC is utilised by ECO
for payment of GST on services provided by
ECO on its own account (say, to a restaurant).
The situation in this regard remains unchanged
even after ECO is made liable to pay tax on
restaurant service. ECO would be eligible to
ITC as before. Accordingly, it is clarified that
ECO shall not be required to reverse ITC on
account of restaurant services on which it pays
GST in terms of section 9(5) of the Act.
It may also be noted that on restaurant
service, ECO shall pay the entire GST
liability in cash (No ITC could be utilised for
payment of GST on restaurant service supplied
through ECO)
7. Can ECO utilize its Input Tax
Credit to pay tax w.r.t
‘restaurant service’ supplied
through the ECO?
No. As stated above, the liability of payment of
tax by ECO as per section 9(5) shall be
discharged in cash.
8. Would supply of goods or
services other than
ECO is required to pay GST on services
notified under section 9(5), besides the
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‘restaurant service’ through
ECOs be taxed at 5% without
ITC?
services/other supplies made on his own
account.
On any supply that is not notified under section
9(5), that is supplied by a person through ECO,
the liability to pay GST continues on such
supplier and ECO shall continue to pay TCS on
such supplies.
Thus, present dispensation continues for ECO,
on supplies other than restaurant services. On
such supplies (other than restaurant services
made through ECO) GST will continue to be
billed, collected and deposited in the same
manner as is being done at present. ECO will
deposit TCS on such supplies.
9. Would ‘restaurant service’
and goods or services other
than restaurant service sold
by a restaurant to a customer
under the same order be
billed differently? Who shall
be liable for raising invoices
in such cases?
Considering that liability to pay GST on
supplies other than ‘restaurant service’ through
the ECO, and other compliances under the Act,
including issuance of invoice to customer,
continues to lie with the respective suppliers
(and ECOs being liable only to collect tax at
source (TCS) on such supplies), it is advisable
that ECO raises separate bill on restaurant
service in such cases where ECO provides other
supplies to a customer under
the same order.
10. Who will issue invoice in
respect of restaurant service
supplied through ECO -
whether by the restaurant or
by the ECO?
The invoice in respect of restaurant service
supplied through ECO under section 9(5) will
be issued by ECO.
11. Clarification may be issued
as regard reporting of
restaurant services, value and
tax liability etc in the
GST return.
A number of other services are already notified
under section 9(5). In respect of such services,
ECO operators are presently paying GST by
furnishing details in GSTR 3B.
The ECO may, on services notified under
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section 9 (5) of the CGST Act,2017, including
on restaurant service provided through ECO,
may continue to pay GST by furnishing the
details in GSTR 3B, reporting them as outward
taxable supplies for the time being.
Besides, ECO may also, for the time being,
furnish the details of such supplies of restaurant
services under section 9(5) in Table 7A(1) or
Table 4A of GSTR-1, as the case maybe, for
accounting purpose.
Registered persons supplying restaurant
services through ECOs under section 9(5) will
report such supplies of restaurant services
made through ECOs in Table 8 of GSTR-1
and Table 3.1 (c) of GSTR-3B, for the time
being.
3. Difficulty, if any, in the implementation of this circular may be brought to the
notice of the Board.
Yours faithfully,
Anna Sosa Thomas
Technical Officer (TRU)
Email: anna.thomas@gov.in
