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

Which statement correctly distinguishes section 9(5) of the CGST Act, 2017 from section 9(3), as read with the proviso on an electronic commerce operator having no physical presence in the taxable territory?

Under section 9(5), for notified services supplied through an e-commerce operator, the operator pays tax as if he were the supplier, unlike section 9(3) where the recipient pays. Without physical presence, a representative or a person appointed by the operator in the taxable territory is liable.

  1. AUnder 9(5), notified services supplied through an e-commerce operator are taxed in the operator's hands as if he were the supplier; if the operator has no physical presence, its representative, or a person it appoints, is liable to pay the taxCorrect
  2. BUnder 9(5), the recipient of the service pays tax on reverse charge, same as 9(3)
  3. CUnder 9(5), an operator without physical presence in the taxable territory is exempt from payment of tax
  4. DUnder 9(5), tax is paid by the Central Government on behalf of the operator when no representative exists

Explanation

Section 9(5) treats the e-commerce operator as the supplier liable to pay tax on notified services, not the recipient as in 9(3). The provisos make a representative liable, or require the operator to appoint a person in the taxable territory. So exemption or recipient liability is wrong.

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