2018 (12) TMI 711 – APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – 2019 (20) G. S. T. L. 161 (App. A. A. R. – GST) – Levy of GST – electronic commerce operator or not – money paid by the customer directly to the driver of the cab for the service of the trip – Held that:- In the instant case the transportation of passenger service is provided by the taxi drivers by using a software application. Transportation of passengers is a taxable service liable to GST. The provision of this service by the taxi driver to the passenger is a ‘supply’ within the scope of supply given in Section 7 of the CGST Act since the service is provided for a consideration. The Appellant on the other hand has developed a digital platform which aggregates the taxi drivers on one common platform. The service of transportation of passengers is supplied by the taxi drivers using the digital application developed by the Appellant. The Appellant manages the digital application which facilitates the supply of the
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HI, AND SHRI. M.S. SRIKAR, MEMBER Represented by: Sri Chandrashekar Reddy, Managing Director PROCEEDINGS (Under Section 101 of the CGST Act, 2017 and the KGST Act, 2017) At the outset we would like to make it clear that the provisions of both CGST, Act 2017 and SGST, Act 2017 are in pari material and have the same provisions in like matter and differ from each other only on a few specific provisions, Therefore unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. The present appeal has been filed under section 100 of the Central Goods and Service Tax Act 2017 and Karnataka Goods and Service Tax Act 2017 (herein after referred to as CGST Act, 2017 and SGST Act, 2017) by M/s. OPTA cabs Private Limited, (herein after referred to as Appellant) against the advance Ruling No. KAR/ADRG 14/2018 Dated: 27th July 2018. = 2018 (8) TMI 933 – AUTHORITY FOR ADVANCE RULINGS, K
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cab for the service of the trip is liable to GST and whether the applicant is liable to pay GST on this amount. 4. It was decided by the Karnataka Advance Ruling Authority vide Ruling No. KAR/ADRG 14 OF 2018 July 27, 2018 = 2018 (8) TMI 933 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA that GST is leviable on the amounts billed by the appellant on behalf of the taxi operators for the services provided in the nature of transportation of passengers through it. 5. Aggrieved by the said Ruling of the Authority (herein after referred to as impugned order ), the appellant has filed an appeal under section 100 of the CGST Act, 2017 and KGST Act, 2017 on the following grounds. i. The Advance Ruling Authority has erred in holding that GST is leviable on the amounts billed by the appellant on behalf of the taxi operators for the services provided in the nature of transportation of passengers through it and is without consideration of the facts of the case and applicant s interpretation of law. ii.
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paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. vi. Authority for Advance Ruling verified the model of OPTA and held that as per Section 9(5) of the Central Goods and Services Tax Act, 2017 and Notificatio
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ibility of the deemed supplier. vii. OPTA model services of taxi are not supplied through it, due to following reasons: There is no privy of contract on account of payment between OPTA and customer. Customers pay directly to taxi drivers; and OPTA does not charge any trip commission from taxi drivers. Thereby there is no flow of consideration on account of any particular trip undertaken by the said taxi driver. OPTA charges monthly rentals to taxi driver for usage of IT platform. The responsibility of OPTA is limited to providing a stable and fully functional IT platform to taxi drivers, and provision of taxi driver services is the sole responsibility of taxi drivers for which no part of income accrues to OPTA. OPTA does not ensure any work to any taxi driver, neither does it offer any incentives for completing particular value of transactions in limited time. viii. In view of the above appellant pleaded that the impugned order be set aside. Personal Hearing 6. The appellant was called
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n their written submissions as well as at the time of personal hearing. Briefly stated the facts are that the Appellant is in the business of operating taxi aggregation service wherein the Appellant provides an IT platform whereby services of information technology is provided to both the customers and the taxi operators for the usage of service. The business model of the Appellant is that a potential customer would book the taxi by using the IT platform provided by the Appellant and the taxi operator would be intimated about the potential customer through the same IT platform. On completion of the journey, the Appellant sends an invoice to the customer using the IT platform and the charges for the taxi ride are paid by the customer directly to the taxi driver by way of cash, mobile wallets or online payment. The Appellant does not charge any commission from the taxi driver for the trip. For providing this digital platform, the Appellant collects a prepaid monthly subscription from the
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portation of passengers is a taxable service liable to GST. The provision of this service by the taxi driver to the passenger is a supply within the scope of supply given in Section 7 of the CGST Act since the service is provided for a consideration. The Appellant on the other hand has developed a digital platform which aggregates the taxi drivers on one common platform. The service of transportation of passengers is supplied by the taxi drivers using the digital application developed by the Appellant. The Appellant manages the digital application which facilitates the supply of the service of transportation of passengers. 11. Further, the appellant owns and operates the IT platform for the supply of service of transportation of passengers over the digital network. Using this digital network facility the Appellant provides the taxi aggregation service wherein they connect both the customer as well as the taxi operator. The customer would book the taxi by using the IT platform provided
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ion (5) of section 9 of the CGST Act and Notification No. 17/2017 – Central Tax (Rate) dated 28th Junes 2017 was issued whereby, the services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle was notified as the category of services, the tax on intra-State supplies of which shall be paid by the electronic commerce operator. 14. Section 9(5) of the CGST Act shifts the liability to pay the tax from the actual supplier of the notified services to the e-commerce operator. The provisions of Section 9(5) Of the CGST Act do not in any way imply that the Supplier of the service is the e-commerce operator. Only the liability to pay the tax is now cast upon the e-commerce operator. The supply of the service of transportation of passengers continues to be the taxi operators However, since the service is supplied by them through the e-commerce platform, the liability to pay the tax is cast upon the e-commerce operator by virtue of Notification No 17/2017 CT(
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he nature of booking . Honouring such requests by the supplier of the goods or services, in return for a consideration, is the taxable event of supply . Therefore, booking for a service is also an integral part of the supply chain and hence there is no merit in the argument of the Appellant that the service has merely been booked on their platform and not supplied through it . We reiterate here that the supply of the service of transportation of passengers has been provided through the digital platform and by virtue of the provisions of Section 9(5) of the CGST Act, the e-commerce operator (the one who manages and operates the digital platform) is the person who is liable to pay the tax on all intra-state supplies as if he is the supplier. 15. The electronic commerce operator shall be liable to pay tax on the services provided by a motor cab or maxi cab or motor cycle or radio-taxi, by way of transportation of passengers, if such services are supplied through it and it shall be deemed
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