Indirect Tax Laws · Electronic Commerce Transactions

Section 9(5) CGST: Tax Liability on E-Commerce Operators for Notified Services

Updated 5 October 2026 · Fact-checked

Under Section 9(5) CGST, the Government can notify services on which the e-commerce operator, not the supplier, pays GST when they are supplied through its platform. Examples: passenger transport, accommodation, housekeeping and restaurant services. The operator is treated as the supplier. To solve, check the notified list and its conditions, then fix who pays.

Understand Section 9(5) Tax Liability on Operators for Notified Services

Normally the supplier pays GST on what it supplies. An e-commerce operator (ECO) that only runs a platform is not the supplier, so it only has to collect tax at source under Section 52 (TCS) on the supplies made through it.

Section 9(5) is an exception. On the recommendation of the GST Council, the Government may notify categories of services on which tax on intra-State supplies is paid by the ECO, if those services are supplied through it. For those services the ECO is treated as if it were the supplier liable to pay tax, and all provisions of the CGST Act apply to it on that basis. The matching rule for inter-State supplies sits in Section 5(5) of the IGST Act.

The rule is plain: the list of services is only what the notification says. It has covered local passenger transport by motor vehicle (cab, radio taxi and similar), accommodation, housekeeping and restaurant services, and the list has been amended over time. Conditions differ entry by entry. Do not assume one general condition for all entries.

Passenger transport: covered only for the local passenger transport by motor vehicle named in the notification, and subject to its exclusions. Read the entry. Do not add or drop a supplier-registration condition unless the notification text given says so.
Accommodation: the ECO is liable only where the room is supplied by an unregistered person.
Housekeeping: the ECO is liable only where the service is supplied by an unregistered person.
Restaurant service: the ECO is liable only where the supply falls within the notified entry and outside its exclusions. A restaurant that is required to be registered is outside it. So a registered restaurant pays its own GST and the ECO only deals with TCS. Check the restaurant's status in the facts.

In an exam, use the notification text given in the question and check the condition of the specific entry.

If the ECO has no physical presence in the taxable territory, the provisos to Section 5(5) of the IGST Act give a separate rule for inter-State supplies: the person representing it in the taxable territory is liable to pay the tax, and if there is no such representative, the ECO must appoint a person in the taxable territory to pay tax. Apply it as the IGST rule on the facts of an inter-State supply. Do not apply it to an intra-State supply taxed under Section 9(5) CGST.

The big contrast with TCS: under Section 9(5) the ECO pays the GST itself on the full value of the service. Under Section 52 the ECO only collects a small percentage from the supplier's payment and the supplier remains liable to pay GST. Section 52 does not apply to supplies on which the ECO pays tax under Section 9(5).

Key rules to remember

Who pays GST: Notified service + supplied through ECO + conditions of that entry met ⇒ ECO pays GST (treated as supplier); All three tests must be met. If any one fails, the supplier pays tax as usual and the ECO deals with TCS.
Liability of ECO under 9(5): GST payable by ECO = value of the notified service × applicable GST rate; The ECO pays on the value of the notified service itself, not on its own commission. Use the rate stated in the question.
Scope of Section 9(5): Intra-State supplies under Section 9(5) CGST Act; inter-State supplies under Section 5(5) IGST Act; The notification must name the service. Supplier-status conditions apply only to specific entries (for example accommodation and housekeeping by unregistered persons). Passenger transport is covered only as the notified entry and its exclusions state. Restaurant service has notified exclusions, and a restaurant required to be registered is outside it.
ECO without physical presence: Provisos to Section 5(5) IGST Act: representative in taxable territory pays tax; if none, ECO appoints a person in taxable territory; This is an IGST Act rule for inter-State supplies. Do not apply it to an intra-State supply under Section 9(5) CGST.
Link with Section 52: TCS base = net value of taxable supplies through ECO, excluding supplies on which ECO pays tax under 9(5); A supply taxed in the ECO's hands under 9(5) is not also subject to TCS. Other supplies through the ECO remain in the TCS base.

How to solve Section 9(5) Tax Liability on Operators for Notified Services questions

Use this order for any question on operator liability. It keeps you from mixing 9(5) with TCS.

1Confirm that an ECO is involved and that the service is supplied through its platform, not by the ECO on its own account.
2Identify the service and check whether it appears in the notified list given in the question (passenger transport, accommodation, housekeeping, restaurant, or any other listed entry).
3Check the conditions attached to that specific entry, such as the status of the supplier (for entries like accommodation and housekeeping) and any exclusions in the notification (for example for restaurants required to be registered).
4Check that the supply is intra-State. For inter-State supplies, state that the matching IGST provision applies.
5If the tests are met, state that the ECO is treated as the supplier and pays tax on the value of the service at the stated rate.
6If the tests are not met, state that the supplier pays tax and the ECO deals with TCS under Section 52.
7For an inter-State supply by an ECO with no physical presence in the taxable territory, state the IGST rule on who is liable: the representative, or the person the ECO appoints.
8Write the conclusion with the amount of tax, who pays it, and whether TCS applies.

Quickest way: Three-gate check

When to use it: Use it for case-scenario MCQs where you have about a minute per question.

Gate 1: Is the service on the notified list? If no, the supplier pays and TCS applies.
Gate 2: Is the condition of that specific entry met? Accommodation and housekeeping need an unregistered supplier. Restaurant service has notified exclusions, and a restaurant required to be registered is outside it. For passenger transport, apply the entry and exclusions as the question's notification text states. If the condition fails, the supplier pays.
Gate 3: Is it supplied through the ECO? If yes, the ECO pays GST and no TCS applies on that supply.
Then compute: value × rate, and move on.

Common mistakes in Section 9(5) Tax Liability on Operators for Notified Services

Treating every service sold through an app as covered by Section 9(5).
Students remember that apps like cab and food platforms pay GST and generalise.
Fix: Only services named in the notification are covered. Match the service to the list first.
Applying TCS on a supply on which the ECO already pays tax under Section 9(5).
Students link every ECO with TCS under Section 52.
Fix: Exclude such supplies from the TCS base. The ECO pays tax on them as the supplier.
Applying one common condition, such as 'unregistered supplier', to every entry.
Students memorise the accommodation condition and use it everywhere.
Fix: Read the condition of each entry. Accommodation and housekeeping apply to unregistered suppliers only, so a registered hotel pays its own GST and the ECO only collects TCS. Restaurant service has its own exclusions. For cab services, follow the notified entry and do not invent a supplier-status condition.
Computing the ECO's tax on its commission or booking fee.
Students think the ECO is taxed on what it earns.
Fix: As the deemed supplier, the ECO pays tax on the value of the notified service supplied, such as the full fare or room tariff.
Forgetting the rule for a foreign ECO with no physical presence in India, or applying it to an intra-State supply under Section 9(5).
It is a short rule in the IGST Act that is easy to skip or to misplace.
Fix: For an inter-State supply, state that under the IGST Act the representative in the taxable territory is liable, or that the ECO must appoint one. For an intra-State supply, apply Section 9(5) CGST directly.
Saying that the supplier on the platform must register and pay tax anyway.
Students mix the normal rule with the exception.
Fix: Under 9(5) the ECO pays the tax. The supplier does not pay tax on that supply. Whether the supplier needs registration depends on the registration provisions, so read the facts.

Worked examples

Example 1

Stayzy Ltd runs an online hotel booking platform. In a month, bookings through it: (a) Hotel Anand, an unregistered small hotel, room services of ₹60,000; (b) Hotel Bhavya, a registered hotel, room services of ₹80,000. All supplies are intra-State. Assume the notification makes the ECO liable for accommodation by unregistered suppliers, the GST rate on the rooms is 5%, and the TCS rate is 0.5% (0.25% CGST + 0.25% SGST). Who pays the GST and how much?

Show the solution

Hotel Anand: accommodation is a notified service, the supplier is unregistered, and it is supplied through the ECO. So Section 9(5) applies.
Stayzy is treated as the supplier. GST = ₹60,000 × 5% = ₹3,000, paid by Stayzy.
No TCS applies on Anand's supply, because it is a supply on which the ECO pays tax under Section 9(5).
Hotel Bhavya: the supplier is registered, so the condition of the accommodation entry is not met. Bhavya pays GST on its own supply = ₹80,000 × 5% = ₹4,000.
Stayzy collects TCS under Section 52 on Bhavya's net value of taxable supplies: ₹80,000 × 0.5% = ₹400.

Answer: Stayzy pays GST of ₹3,000 on Hotel Anand's rooms and no TCS applies on them. Hotel Bhavya pays its own GST of ₹4,000, and Stayzy collects TCS of ₹400 on Bhavya's supplies.

Example 2

Rideon Pvt Ltd runs a cab-booking app and has an office in Pune. A cab driver, an unregistered individual, provides an intra-State ride in Pune for ₹1,000 through the app. Assume the notification text given covers local passenger transport by motor cab with no condition on the driver's registration, and the GST rate is 5%. Who is liable, how much tax is due, and does TCS apply?

Show the solution

The service is local passenger transport by motor cab, which is on the notified list, and it is supplied through the ECO's app. The ride is intra-State, so Section 9(5) CGST governs.
Rideon is treated as the supplier and is liable to pay the tax, not the driver.
Tax = ₹1,000 × 5% = ₹50.
Section 52 TCS does not apply to this ride, because the ECO pays tax on it under Section 9(5).
The IGST rule on a representative of an ECO without presence is not needed here. That rule is for inter-State supplies, and this ride is intra-State.

Answer: GST of ₹50 is payable by Rideon under Section 9(5) CGST. The driver does not pay tax on this ride, and no TCS applies.

Exam tips

Write the section number and name the provision clearly: 'Under Section 9(5) of the CGST Act, the ECO is treated as the supplier.' Then apply it to the facts.
Quote the conditions from the notification text in the question. Questions are often built on a registered versus unregistered supplier twist for accommodation.
In a 'difference between Section 9(5) and Section 52' answer, compare who pays, on what, whether the supplier remains liable, and what the base is.
Do not name a rate from memory if the question gives one. Use the given rate and the given TCS rate.
In case-scenario MCQs, look for the key words 'through the platform' and a service on the list. If either is missing, the supplier pays.

Practice questions from Electronic Commerce Transactions

Section 9(5) Tax Liability on Operators for Notified Services in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Section 9(5) Tax Liability on Operators for Notified Services: frequently asked questions

What is the difference between Section 9(5) and Section 52 TCS?

Under Section 9(5), the ECO itself pays GST on notified services as if it were the supplier. Under Section 52, the ECO only collects tax at source from the supplier's payment, and the supplier remains liable to pay GST. TCS does not apply on supplies where the ECO pays tax under Section 9(5).

Which services come under Section 9(5)?

Only services in the Government notification, which has covered local passenger transport by motor vehicle, accommodation, housekeeping and restaurant services, and has been amended over time. Each entry carries its own conditions. In the exam, use the list given in the question.

Does GST on restaurant service through Zomato or Swiggy fall under Section 9(5)?

Not as a general rule. Restaurant service is covered only where the supply falls within the notified entry and outside its exclusions. A restaurant that is required to be registered is outside it, so a registered restaurant pays its own GST and the ECO only collects TCS. Check the restaurant's status in the facts before concluding.

Who pays GST on a cab booked through an app?

If the ride is local passenger transport by motor vehicle covered by the notified entry and supplied through the ECO, the ECO pays the GST as the deemed supplier, and the driver does not pay tax on that ride. Check the conditions and exclusions of the entry in the question. If the ECO has no presence in India and the supply is inter-State, the IGST Act makes its representative, or a person it appoints, liable to pay.

Can a hotel booked through an ECO ever be outside Section 9(5)?

Yes. The accommodation entry applies only where the supplier is unregistered. A registered hotel pays its own GST and the ECO only collects TCS under Section 52. The status of the supplier decides which rule applies for this entry.