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CA Final · Indirect Tax Laws · Electronic Commerce Transactions

Globex Cart, a foreign e-commerce operator, supplies through its platform a service category notified under section 9(5) for intra-State supplies in India. It has no physical presence in the taxable territory and no representative there. Who is liable to pay the tax?

The person appointed by Globex Cart in the taxable territory is liable. Under the second proviso to section 9(5), an operator with no physical presence and no representative must appoint such a person for paying tax, and that person bears the liability.

  1. AThe service recipient under reverse charge
  2. BThe person Globex Cart is required to appoint in the taxable territory for the purpose of paying taxCorrect
  3. CNo one, since there is no presence
  4. DThe individual service providers only

Explanation

The second proviso to section 9(5) says that where the operator has no physical presence and no representative in the taxable territory, it shall appoint a person there for paying tax, and that person is liable to pay tax. If there were a representative, the first proviso would make that representative liable. Option A is wrong as reverse charge under 9(3) is a separate mechanism.

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