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CA Final · Indirect Tax Laws · Charge of GST

Bharat Cabs Ltd., a foreign electronic commerce operator with no physical presence and no representative in India, supplies through its app a category of services notified under the e-commerce operator provision for payment of tax by the operator. What does the law require regarding payment of tax?

The foreign operator must appoint a person in the taxable territory for the purpose of paying tax, and that person becomes liable to pay the tax. This applies where the operator has no physical presence and no representative there, for services notified for payment by the operator.

  1. AThe individual service providers alone pay tax, as the operator is outside India
  2. BThe operator must appoint a person in the taxable territory for the purpose of paying tax, and that person is liable to pay taxCorrect
  3. CThe recipient of each service pays tax on reverse charge
  4. DNo tax is payable as the operator lacks a presence in the taxable territory

Explanation

For notified services the operator is treated as the supplier liable for tax. If it has no physical presence and no representative in the taxable territory, it must appoint a person there for paying tax, and that person is liable to pay tax. The other options contradict this.

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