Every Digital Platform an E-Commerce Operator under GST? The Fine Legal Distinction

India’s digital economy has changed how business works. Apps and websites now connect buyers, sellers, drivers, restaurants, service providers, and customers across the country. This growth has raised one recurring GST question. Is every digital platform an e-commerce operator under GST?

The answer is no. GST law draws a clear legal distinction. That distinction depends on how the platform functions in a transaction. Many disputes arise because businesses ignore this difference.

This article explains the legal framework, the role-based test under GST and how courts and authorities have applied the law.

What GST means by electronic commerce

GST law defines electronic commerce as the supply of goods or services or both, including digital products, over a digital or electronic network. Two elements must exist.

First, there must be a supply. Second, the supply must take place through a digital network.

A website or app that does not enable a supply does not fall within this definition. Mere online presence does not attract GST obligations as an e-commerce operator.

Read More: Unregistered Sellers on E-Commerce Platforms: New GST ComplianceBurden on Operators

Who is an e-commerce operator under GST

GST defines an e-commerce operator as a person who owns, operates, or manages a digital or electronic platform for electronic commerce. Ownership is not mandatory. Control or management of the platform is sufficient.

This definition is broad. Yet GST obligations do not attach to every platform automatically. The law looks at the role played by the platform in the supply chain.

Courts and authorities examine function, not branding.

The decisive test: control over the supply

The core question remains simple. Does the platform control the supply of goods or services?

A platform that only hosts advertisements or listings does not control supply. A platform that only generates leads and shares contact details does not control supply.

A platform that accepts orders, allocates service providers, manages cancellations, or enforces service standards controls supply. GST treats such platforms as active participants.

This approach reflects substance over form.

Payment flow as a strong indicator

Payment handling changes the legal position. When a platform collects payment from customers and releases it to suppliers, it controls the transaction.

Such platforms attract tax collection at source obligations under Section 52 of the CGST Act. They must register, file GSTR-8 returns, and ensure reconciliation with supplier returns.

If payment flows directly between buyer and seller, the platform does not trigger this obligation on that ground.

E-commerce operator is not equal to tax collector

Many businesses assume every e-commerce operator must collect tax at source. This assumption is incorrect.

Compulsory registration under GST applies only when the operator is required to collect tax at source. A platform can qualify as an e-commerce operator and still remain outside Section 52.

This distinction protects genuine facilitators from unnecessary compliance.

Read More: GST on E-Commerce Aggregator Models: Why Uber is Treated asSupplier but Amazon is Not

Section 9(5): deemed supplier for notified services

GST law shifts tax liability to e-commerce operators for certain notified services. These include passenger transport, housekeeping services, and restaurant services.

When such services are supplied through the platform, the platform becomes liable to pay GST as the deemed supplier.

This rule applies only when the platform controls booking and service allocation. Platforms that only generate leads do not fit this model.

What case law shows in practice

Judicial and quasi-judicial decisions reinforce this functional test.

In the Uber India Systems advance ruling, the authority held that Uber qualifies as an e-commerce operator. Uber controls the platform through which transport services are supplied. It manages bookings, allocates drivers, collects fares, and enforces service conditions. For notified transport services, GST liability shifts to the platform.

A similar position emerged in rulings concerning Ola. The authorities focused on control over ride allocation, fare collection, and platform rules. Ownership of vehicles was irrelevant.

Food delivery platforms such as Swiggy and Zomato also fall within the GST e-commerce framework. Orders are placed through the app. Payments route through the platform. The platform controls cancellations and refunds. For restaurant services, GST law places liability on the platform.

Courts have also addressed procedural issues linked to e-commerce compliance. In Sneh Communications v. Deputy Commercial Tax Officer, the Madras High Court dealt with GST proceedings involving portal-based data and mismatches connected to e-commerce transactions. The Court set aside the order due to lack of proper hearing and directed fresh consideration. The case shows that while GST authorities enforce e-commerce compliance strictly, courts insist on procedural fairness.

In Summit Exim v. Assistant Commissioner, the Madras High Court followed a similar approach. The Court treated the assessment order as a show cause notice and directed the authority to pass a fresh order after hearing the taxpayer. These decisions underline that GST compliance for platforms must follow due process.

Multiple platforms in one transaction

Modern digital transactions involve more than one platform. One platform may list products. Another may handle payments. A third may manage logistics.

GST focuses on the platform that releases payment to the supplier. That platform bears responsibility for tax collection duties linked to payment flow. This approach avoids duplication and confusion.

Common mistakes by digital businesses

Many platforms add features without assessing tax impact. Introducing payment collection or enforcing service standards can alter GST status overnight.

Another common mistake involves software providers. Providing software tools does not make a company an e-commerce operator unless the software itself enables supply through the provider’s platform. Contracts that do not match actual operations invite disputes.

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