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CA Final · Indirect Tax Laws · Electronic Commerce Transactions

Zenith Travels, a registered person, supplies services through the app of an e-commerce operator. The Government has notified the category of services under section 9(5) as one on which the operator must pay tax. Who is liable to pay the tax on the intra-State supply of that notified service, and how do the provisions of the Act apply?

The electronic commerce operator pays the tax on the notified service. Under section 9(5), the Act applies to the operator as though it were the supplier liable to pay tax, so the actual supplier is not the person liable for that supply.

  1. AThe supplier Zenith Travels, because the operator only provides a platform
  2. BThe recipient of the service, under reverse charge on all notified supplies
  3. CThe electronic commerce operator, and the Act applies to it as if it were the supplier liable to pay the taxCorrect
  4. DThe Government, until the operator opts to pay

Explanation

Section 9(5) lets the Government notify categories of services whose intra-State tax is paid by the e-commerce operator when supplied through it. All provisions of the Act then apply to the operator as if it were the supplier liable to pay tax. The supplier is therefore not the person liable, so option A is wrong.

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