New Delhi: E-commerce platforms operating restaurant services will now have to pay the goods and services tax (GST) liability entirely by cash, the Central Board of Indirect Taxes and Customs (CBIC) said in a circular. The platforms will not be able to settle GST liabilities against any tax credit available to them from their operations.Also Read - Govt Reduces Compliance Burden For GST Taxpayers | Details Here

“E-commerce operators shall pay the entire GST liability in cash (no input tax credit could be utilised for payment of GST on restaurant service supplied through e-commerce operators),” CBIC said giving clarity to e-commerce platforms like Zomato and Swiggy, that provide online restaurant services. Also Read - GST Collection In November Soars To Over Rs 1.31 Lakh Crore

With an aim to improve compliance, GST Council, in September, shifted the onus of tax collection from restaurants to e-commerce platforms, and decided to make e-commerce companies in transport and food delivery sectors liable to collect taxes on behalf of drivers and eateries. Also Read - Why Bringing Petrol, Diesel under GST Imperative to Control Price Rise

CBIC also notified that e-commerce platforms are liable to pay GST on any restaurant service rendered by them including by an unregistered person.

“As ‘restaurant service’ has been notified under section 9(5) of the CGST Act, 2017, the e-commerce operator shall be liable to pay GST on restaurant services provided, with effect from the 1st January 2022, through e-commerce operator. Accordingly, the e-commerce operators will no longer be required to collect Tax Collected at Source (TCS) and file GSTR 8 in respect of restaurant services on which it pays tax in terms of section 9(5),” said CBIC.

On other goods or services supplied through e-commerce operator, which are not notified under secion 9(5), e-commerce operators will continue to pay TCS in terms of section 52 of CGST Act, 2017 in the same manner at present, it added.