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CA Final · Indirect Tax Laws · Electronic Commerce Transactions

Zenith Bazaar Pvt. Ltd., an e-commerce operator, has been notified under section 9(5) of the CGST Act to pay tax on intra-State supply of a specified category of services supplied through it. Which statement correctly describes the legal position for such services?

For categories of services notified under section 9(5), the electronic commerce operator pays the tax, and the Act applies to it as if it were the supplier liable to pay tax. This differs from tax collection at source and from reverse charge on the recipient.

  1. AThe supplier remains liable to pay tax, and the operator only collects tax at source
  2. BThe operator is treated as the supplier liable for paying the tax on those services, and the Act applies to it accordinglyCorrect
  3. CThe recipient pays tax under reverse charge under section 9(3)
  4. DThe operator is liable only if it has a physical presence in the taxable territory

Explanation

Under section 9(5), for notified categories of services supplied through the operator, tax is paid by the operator and all provisions of the Act apply to it as if it were the supplier liable to pay tax. Option A describes section 52 collection, not section 9(5). Option C confuses it with section 9(3). Option D is wrong because the provisos cover operators without physical presence through a representative or an appointed person.

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