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CA Final · Indirect Tax Laws · Charge of GST

Bharat Cabs Ltd, a taxable person, supplied services through an electronic commerce operator, Ridex Inc., a foreign company with no physical presence and no representative in India. The services are notified under section 9(5), so Ridex must pay the tax on intra-State supplies. Who is liable to pay the tax?

Ridex Inc. is liable, discharging the tax through a person it must appoint in the taxable territory. Section 9(5) makes the operator liable for notified services, and its second proviso requires an operator without presence or representative in India to appoint someone who becomes liable to pay the tax.

  1. AThe driver supplying the service, in all cases
  2. BRidex Inc., through a person it must appoint in the taxable territory for paying tax, who is liable to pay taxCorrect
  3. CThe recipient of the service under section 9(3)
  4. DNo one, as Ridex has no presence in India

Explanation

Under section 9(5) the electronic commerce operator is treated as the supplier liable to pay tax for notified services. The second proviso requires an operator with no physical presence and no representative in the taxable territory to appoint a person there for paying tax, and that person is liable to pay tax. Option (d) is wrong because absence of presence does not remove liability.

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