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CMA Intermediate · Direct and Indirect Taxation · Levy and Collection of CGST and IGST

Under section 9(5) of the CGST Act, 2017, the Government notifies certain categories of services on which the electronic commerce operator pays the tax. An e-commerce operator supplying such services through its platform has no physical presence and no representative in the taxable territory. What does the Act require?

The operator must appoint a person in the taxable territory to pay the tax, and that person becomes liable. This follows from the second proviso to section 9(5) for notified services supplied through an e-commerce operator with no physical presence or representative in the territory.

  1. AThe supplier on the platform alone pays the tax, as the operator is outside the territory
  2. BTax is not payable until a representative is voluntarily appointed
  3. CThe operator must appoint a person in the taxable territory to pay the tax, and that person is liableCorrect
  4. DThe recipient of the services must pay tax on reverse charge basis

Explanation

The second proviso to section 9(5) states that an operator with no physical presence and no representative in the taxable territory must appoint a person there for the purpose of paying tax, and that person is liable to pay it. The other options contradict this, as the Act does not leave liability unassigned or shift it to the recipient.

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