Date of order: 27.10.2022

Facts:

• The applicant, M/s. Multi-Verse Technologies Private, is engaged in the business of providing computer software application services designed to run on digital devices such as mobile phones, tablets, and personal computers in the state of Karnataka and the said services are meant for facilitating business transactions of supply of goods or services or both connecting through the platform of suppliers/sellers and recipients/buyers.
• Every person desirous of availing of the Applicant's App services shall make an application online in the presubscribed form duly filled and confirmed along with the specified soft copies of documents and shall enter into "END USER LICENSE AGREEMENT" online.
• The applicant is limited to providing of "APP" and collection of registration & monthly subscription fee from their subscribers of "APP" and charging, collecting and remitting tax in terms of the charging provisions of Section 9(1) of the CGST Act and Section 5(1) of the IGST Act and Notification No.11/2017- Central Tax (Rate) dated 28.06.2017.

Issues:

• Whether the applicant qualifies to be an e-commerce operator or not and whether they are liable to discharge tax liability in terms of Section 9(5) of the CGST Act 2017. 

Order:

• The authorities observed that applicant owns a digital platform (APP MY"), for the supply of goods or services or both. Thus the applicant squarely fits into the definition and qualifies to be an Electronic Commerce Operator.
• The word ‘through’ in the phrase services supplied through electronic commerce operator, in Section 9(5) ibid, gives the meaning that the services are to be supplied by means of /by the agency of/from beginning to the end/during entire period by the e-commerce operator.
• It is observed that the applicant, because of their unique business model, merely connects the driver and passenger and their role ends on such connection; they do not collect the consideration; they have no control over actual provision of service by service provider, they do not have the details of the ride; they do not have control room/call centre etc.
• The applicant, though qualifies the definition of being an e-commerce operator, is not the person liable for discharge of tax liability under Section 9(5) of the CGST Act, 2017.
• The Applicant satisfies the definition of an e-commerce operator but does not satisfy the conditions of Section 9(5) of CGST Act 2017 r/w Notification No.17/2017 dated 28.06.2017, for the discharge of tax liability by an electronic commerce operator.
• The supply by the service provider (person who has subscribed to Applicant's app) to his customers (who also have subscribed to Applicant's app) on the Applicant's computer application does not amounts to supply by the Applicant.
• Hence, the Applicant is not liable to collect and pay GST on the supply of goods or services supplied.