The West Bengal Authority of Advance Ruling has held that the applicant who provides supply of services by connecting the passenger to the drivers through the app developed by him falls under the category of e-commerce operator and no Goods and Service Tax (GST) shall be payable.
Table of Contents
The bench of Tanisha Dutta and Joyjit Banik has observed that even though the applicant qualifies to be an electronic commerce operator, the supply of services is not made through him but such supply is independent in nature. Therefore, the applicant, though qualifies the definition of being an e-commerce operator, does not satisfy the conditions of Section 9(5) of the GST Act for discharging the tax liability by an electronic commerce operator and hence, is not the person liable for discharge of tax liability under section 9(5) of the GST Act.
Background
The applicant is a society registered under the West Bengal Societies Registration Act, 1961 which is a non-profit organisation who is engaged as a research and development organisation under the Department of Information Technology & Electronics, Government of West Bengal and is engaged in the development of language tools & technology as well as Online Literary & Linguistic resources etc.
The applicant, under the direction of the Government of West Bengal, has developed a website and mobile application named “Yatri Sathi Mobile App”. The App has been launched on the ONDC platform and is designed as a ride-hailing Software as a Service (SaaS) platform, also categorised as a Mobility as a Service (MaaS) solution. The primary purpose of the App is to facilitate the business transaction of supply of services by connecting customers to the drivers of West Bengal.
The applicant also submits that the App comprises of two components namely, Driver-side App and Customer-side App. The Driver-side App is designed for use by drivers to offer transportation services by means of four wheeler or two wheeler vehicles.
On the other hand, the Customer-side App is intended for customers to connect with drivers for their transportation needs. Through this dual-application system, the App effectively links customers with available drivers.
The ownership and management of the Yatri Sathi Mobile App rest solely with the applicant. The App’s development and ongoing operations are overseen by the applicant, ensuring compliance with the directives and standards set forth by the Government of West Bengal.
Issues Raised
- Whether the applicant falls under the purview of the E-commerce Operator as defined in sec 2(45) of the GST Act?
- Whether the applicant shall be deemed to be the service provider u/s 9(5) of the GST Act read with notification no. 17/2021-Central tax(rate) dated 18th November, 2021 for the Driver services provided by the Driver to the Customer connected by “Yatri Sathi Mobile App”?
- Whether the applicant shall be liable to collect and pay GST on the services supplied by the Drivers (person who subscribed the app) to the Customers (person who subscribed the app) connected through the App considering the Applicant as service provider u/s 9(5) of the GST Act read with notification no. 17/2021-Central Tax (Rate) dated 18th November, 2021?
Conclusion
The AAR ruled that the applicant very much fits into the definition of E-commerce Operator as defined in sec 2(45) of the GST Act and qualifies to be an Electronic Commerce Operator. he supply by the service provider (driver) to his customers (passengers) through Yatri Sathi App does not amount to supply by the Applicant.
The AAR held that the applicant does not satisfy the conditions of Section 9(5) of the GST Act for discharging the tax liability by an electronic commerce operator and hence, is not the person liable for discharge of tax liability under section 9(5) of the GST Act.
What is the GST rate for providing Services of Connecting Passenger To Drivers Through App?
The supply of services by connecting the passenger to the drivers through the app developed by him falls under the category of e-commerce operator and no Goods and Service Tax (GST) shall be payable.
Whether supply of services by connecting the passenger to the drivers through the app is covered under the category of e-commerce operator?
The supply of services by connecting the passenger to the drivers through the app developed by him falls under the category of e-commerce operator and no Goods and Service Tax (GST) shall be payable.
Applicant’s Name: NATURAL LANGUAGE TECHNOLOGY RESEARCH
Date: 10/09/2024
