GST payable by E-Commerce Operator for Commission Received from Website Users: AAR [Read Order]

E-Commerce - Taxscan

The Maharashtra Authority of Advance Ruling ( AAR ) has ruled that, GST is payable by E-Commerce Operator for commission received from website users / pundits , not for on total amount received.

The Applicant is Mr. Sadashiv Anajee Shete is Unregistered person (URD) under GST ACT and is claiming to be engaged in the business of assisting believers, followers and devotees to book pundits/ Brahmins online for their religious ceremonies like pujas, abhisheks etc. The said service is being provided through the applicant’s own website by charging the money.

Applicant submitted that he hires various expert Pundits in order to provide services of religious ceremony like pujas, abhisheks etc.to the interested persons. Applicant have three types of business models as stated above in scenario which are available on their own website to the concerned public for the service fees and terms and conditions. The service recipient can choose as per their own option.

The applicant is facilitating in making available Pundits/Brahmins for the conduct of puja or abhishek through such Pundits/Brahiniris those who are in his touch and are ready to be available at his request. The puja or Abhishek are actually performed by the pundits/ Brahmins on the desired location of customers. All the religious functions are carried out by Pundits on their own once he informs the details of the person and place where it is to be conducted. The applicant is not a person who actually perform the services like puja /abhishek or makes an other arrangement in this respect as discussed above. he is facilitator between the pundits and customers. He is acting as an agent to cordinate between the person who wants services of conduct of religious ceremony like puja and abhishek from the pundits who are actually performing.

Considering the facts of the transaction referred by the applicant, as per section 15 (1) the value of supply of services shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.

While ruling against the application the AAR said that, “In the present case we find that applicant and recipient are not related persons and price received is sole consideration. We further see that these services are given by the applicant in his business models to choose the type of model. In all the three business models we find that consideration is first received by him on online as a whole and thereafter major part of it, is given to Pundits who are having an agreement with the applicant to provide their services as and when it is requisitioned but they are not the applicant’s employees but are providing their services independently. The actual basic services like puja and abhishek etc are performed by the pundits or Brahmins which are exempted by nature of notification issued under GST ACT. The commission portion is received to the applicant out of total consideration received online from the service recipient. As per the provisions of law the commission is the supply of service and it would be the value on which he would be liable for GST the Applicant would be liable to pay GST on the value of commission received from website users, not total amount received”.

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