Supply through e-commerce operators (ECOs) u/s 9(5)

Under Section 9(5) of the CGST Act, 2017, specific provisions apply to sales made through e-commerce operators (ECOs), where the e-commerce operator becomes liable to pay GST, instead of the actual supplier. Here's a comprehensive explanation of all the rules and implications of Section 9(5) as of the latest available update:

🔍 What is Section 9(5) of the CGST Act?

Section 9(5) of the CGST Act empowers the Government to notify certain categories of services, where the e-commerce operator, and not the actual supplier of goods or services, is liable to pay GST.

📜 Legal Text (Simplified):

“Notwithstanding anything contained in sub-section (1), in case of specified categories of services the tax on intra-State supplies shall be paid by the e-commerce operator if such services are supplied through it.”

✅ List of Services Notified Under Section 9(5)

As per the latest notifications issued by the Government, the following services are covered under Section 9(5):

Sl. No.	Category of Service	Notification	ECO's GST Liability
1	Passenger transport services via radio-taxi, motor cab, maxicab, motor cycle (e.g., Ola, Uber)	Notification No. 17/2017 – CT (Rate)	GST payable by ECO
2	Accommodation in hotels, inns, guest houses, clubs, campsites (for units not registered under GST)	Notification No. 17/2017 – CT (Rate)	GST payable by ECO
3	Housekeeping services like plumbing, carpentering (for unregistered suppliers)	Notification No. 17/2017 – CT (Rate)	GST payable by ECO
4	Restaurant services provided through ECO (like Swiggy, Zomato)	Notification No. 17/2021 – CT (Rate), w.e.f. 01.01.2022	GST payable by ECO

🧾 Conditions & Clarifications

Only specified services are covered – Not goods.
The ECO is liable only when the service is supplied through its platform.
GST to be paid by ECO under Forward Charge (not reverse charge).
In cases where the supplier is unregistered, the ECO still pays the GST.
The ECO cannot avail threshold exemption (like Rs. 20 lakhs/40 lakhs turnover).
Invoicing: The invoice must be issued by the ECO in its own name for such supplies.
ITC Eligibility: ECO can claim input tax credit on inputs/input services used to provide taxable supplies.

🚫 What is NOT Covered Under Section 9(5)?

Goods sold via e-commerce operators (e.g., Amazon, Flipkart) are not covered under Section 9(5).
In such cases, the supplier is liable to pay GST, and ECO collects TCS under Section 52. (1%)

📊 Example

A customer books a ride via Uber (passenger transport):
→ Uber is liable to pay GST under Section 9(5), not the cab driver.
A customer orders food via Zomato:
→ Zomato pays GST on the restaurant service, even if the restaurant is registered.

📌 Summary of Rules under GST Sec 9(5)

Feature	Rule / Provision
Type of supply	Specified Services only
Who pays GST	E-commerce operator
When	When service is supplied through ECO
Goods included?	❌ No (Only services)
ECO registration required?	✅ Yes
ITC available to ECO?	✅ Yes, if used for business
Reverse charge applies?	❌ No – Forward charge applies
Invoicing	ECO issues invoice in its name
Threshold exemption	❌ Not available to ECO

🚩 Does "Bakery" fall under "Restaurant Services" under GST Section 9(5)?

The answer depends on how the bakery operates. Let's break it down:

🔍 Definition of "Restaurant Services" as per GST Notification

As per Notification No. 11/2017 – Central Tax (Rate) and later amendments:

"Restaurant service" means:

“supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article is supplied.”

✅ So, When is a Bakery Considered a Restaurant Service?

Bakery Type	Dine-in/Takeaway Facility	GST Treatment	Covered under Section 9(5)?
Pure Bakery (selling cakes, bread, etc. as takeaway or packaged)	❌ No dine-in or food preparation on order	Treated as sale of goods	❌ Not covered under Sec 9(5)
Bakery with Café Setup (serves food on premises, dine-in or takeaway like sandwiches, coffee, etc.)	✅ Yes	Treated as restaurant service	✅ Yes, if supplied through ECO like Zomato
Cloud Kitchen / Online-only Bakery (prepares and delivers food)	✅ Yes	Treated as restaurant service	✅ Yes, covered under 9(5)

🧁 Key Clarification:

If your bakery prepares and serves food (even for delivery) and the service involves cooking/preparation, it will qualify as "restaurant service".
If the bakery only sells pre-packed goods, like a regular retail store (bread, biscuits, packaged cake), it is not a restaurant and hence not covered under Section 9(5).

🧾 Example:

ABC Bakery sells cakes and pastries through Zomato, which are made-to-order or ready-to-eat:
✅ Treated as restaurant service → Zomato pays GST under Section 9(5).
XYZ Bakery sells pre-packaged cookies through Amazon:
❌ Not a restaurant service → Bakery pays GST, Amazon collects TCS under Section 52.