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CA Final · Indirect Tax Laws · Charge of GST

A foreign online platform, Globex Inc., has no physical presence or representative in India but is an electronic commerce operator through which notified services are supplied in intra-State supplies in Karnataka. The Government has notified those categories under section 9(5). Which statement is correct?

The operator is deemed the person liable to pay tax on the notified services, and because it has no presence or representative in the taxable territory it must appoint a person there for paying tax, who becomes liable to pay the tax.

  1. AThe actual supplier alone pays tax, as the operator is outside India
  2. BThe operator is treated as supplier liable to pay tax, and must appoint a person in the taxable territory for paying tax who shall be liable to pay taxCorrect
  3. CTax is paid by the recipient under section 9(4) in all cases
  4. DNo one is liable as the operator has no presence in India

Explanation

Under section 9(5), for notified services the operator is treated as the person liable to pay tax. If it lacks physical presence and a representative in the taxable territory, the second proviso requires it to appoint a person there who shall be liable to pay tax. Section 9(4) concerns registered recipients buying from unregistered suppliers, so it does not apply.

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