Section 9 is probably the most important section under the Central GST Act, as it deals with charging tax under GST. This section also covers the principles for the reverse charge mechanism.
The latest notifications dated 28-Jun-2017 deals in particular with reverse charges on eCommerce activity. These notifications carry critical information, not only for vendors / sellers but also for buyers like you and me, who buy from Flipkart, Amazon, MakeMyTrip, Ola, Uber etc.
Here are the most important points to remember about your rights in accordance with these notifications
1. Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle would attract reverse charge
This covers those cases where the services are provided by Ola, Uber etc. Please note that it does not cover all those who provides the cab services but has to keep in mind the following
* the services are provided through electronic commerce operator
* the services relate to transport of passengers
Example – Suppose Mr Chopra uses the Ola Cab for going to office on a particular day and he books a cab from the mobile based application. A cab operated/driven by Mr Santa Singh picks and drops Mr Chopra at his office. Now, the cab services are provided by Mr. Santa Singh to Mr. Chopra, and the role of Ola is basically to connect the service provider and service receiver through its mobile based applications and resources. Also Ola in most cases collects the money on behalf of Mr. Santa Singh. And this is the most important reason due to which the tax payment burden has been shifted to Ola as it is easier to conduct scrutiny of Ola books compared to numerous Santa Singh’s in the market. Hence, for all the services that Santa Singh offers, his part of the GST would be paid by Ola.
2. Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes would also attract Reverse Charge
Detailed Analysis: Recently in the travel industry there are so many players like Make my trip, Oyo Rooms, etc, providing all round services from the complete tour packages to some particular services like room booking only, sight-seeing etc. Here, the government has mandated on the electronic commerce operator (say Oyo Rooms) to pay the tax (all, CGST, IGST and UTGST) under reverse charge. That means even small hotels (like say Hotel Sunshine etc) who would probably never have even got registered under the Act , would generate revenue for the government.
Here it is most important to note that only incases where the hotelier is not registered only in those cases the tax is to be paid by the electronic commerce operator otherwise the tax would be paid under the normal provisions of the Act. That means, if you book a room through MakeMyTrip in Taj Vivanta, the GST would be charged by Taj Vivanta only; and not MakeMyTrip
Have more questions? Check our FAQs on online travel bookings and app-based cab companies
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