Page 13 - Chap2 RCM

ii) M/s Goyal Ganga (the promoter) is liable to pay GST on entire cement purchased from an unregistered
supplier.

04. Section 9(5):- Liability of Electronic Commerce Operator (ECO)

Q.12: Discuss the GST implication in the following case study.
It was a busy Monday morning in Mumbai, and Ravi, a software developer, needed a quick ride to the office.
He opened an app FastCabs (an ECO) to book a motorcab. The app connected him to Mohan, an
independent driver operating his own motorcab.
After a long workday, Ravi needed a place to stay overnight. He found BudgetStay, an unregistered
hotel located near his office. BudgetStay had no GST registration but listed its rooms on an online travel
platform operated by an ECO called StayEasy. Ravi booked a room through StayEasy and was charged for
his stay.
The next morning, Ravi discovered a leaking pipe in his bathroom. In panic, he used the app
QuickFix, which connected him to Suresh, an unregistered plumber. QuickFix was an online platform
(ECO) that specialized in providing various home services such as plumbing and carpentry.
After the long day, Ravi decided to have dinner & ordered food through Zomato from The Royal
Dine, located inside a luxury hotel. The hotel had a accommodation value of ₹10,000 per unit per day for its
rooms, which qualified it as a specified premises under GST law.
Answer:

a) If passenger transport service is supplied by motor vehicle or bike through an ECO, then ECO is liable to pay
tax. But in case of omnibus where supplier is a company, then supplier is liable to pay tax.
In given case: ECO Fast Cab is liable to pay tax.
b) If accommodation for residential or lodging purposes service is provided through ECO by hotel, inn etc.
where it is not liable to register , then ECO is liable to pay tax (Sec 9(5)).
In given case: Stay Easy is liable to pay tax.

c) If housekeeping etc. services supplied by any person through ECO who is not liable to register , then ECO is
liable to pay tax.
In given case: Quick-Fix is liable to pay tax.

d) Supply of restaurant services through ECO — then ECO is liable to pay tax.
Ü But, if restaurant is located in a specified premise where room rent is more than ₹7500 per day, then
supplier i.e., restaurant is liable to pay tax.
Ü So in given case: Royal Dine is located in a luxury hotel where room rent is more than ₹7500 per day,
hence Royal Dine is liable to pay tax.

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