This circular provides clarity on GST applicability and compliance requirements for restaurant services supplied through e-commerce operators (ECOs) pursuant to the recommendation of the GST Council and notification of restaurant service under section 9(5) of the CGST Act, 2017.

With effect from 1 January 2022, the liability to pay GST on restaurant services supplied through ECOs is shifted to the ECO. Accordingly, ECOs are required to pay GST on such services and are not required to collect tax at source (TCS) or file GSTR-8 in respect of these supplies. However, TCS provisions will continue to apply to other goods or services supplied through ECOs that are not covered under section 9(5).

The circular clarifies that ECOs are not required to take separate registration for this purpose and will be liable to pay GST even where restaurant services are supplied by unregistered persons through their platform. Restaurants supplying services through ECOs must include the value of such supplies in their aggregate turnover for threshold and other statutory purposes.

ECOs are not treated as recipients of restaurant services and therefore such supplies are not to be reported as inward supplies. While ECOs remain eligible to avail input tax credit on their own inputs and services, GST payable on restaurant services under section 9(5) must be discharged entirely in cash and not through ITC.

The invoice for restaurant services supplied through ECOs will be issued by the ECO. The circular also provides guidance on return reporting by both ECOs and restaurants to ensure uniform and smooth compliance.