From 1st January 2022, e-Commerce Operators (ECOs) will be responsible for paying GST on restaurant services instead of suppliers.
Section 9(5) of the CGST Act, 2017 now includes restaurant and cloud kitchen services under Notification No. 17/2021 of the Central Board of Indirect Taxes. A restaurant service provided through an e-commerce platform will be subject to GST at 5% under this section. In other words, online food delivery applications will now be required to pay GST. Restaurant service at specified premises is not included in this notification.
For the time being, Circular No. 167/23/2021 - GST confirms that registered persons supplying restaurant services through ECOs will report such supplies in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B.
The supplies made by registered persons through Electronic Commerce Operators (ECOs) shall be excluded from section 9 of the Central Goods and Services Tax Act, 2017 under sub-section (5) of section 9, and shall be reported in section 3.1.1(ii) above in accordance with NOTIFICATION No. 14/2022 – Central Tax.
The main thing to remember here is, still, in GSTR 1, there is no new field for reporting supplies of restaurant services made by ECOs. We still have to report them in Table 8 of GSTR-1. Therefore, such values are reflected automatically in Table 3.1 (c) of GSTR-3B. However, the new notification specifies that supplies of restaurant services provided by ECOs should be reported in 3.1.1(ii).
We must delete such values from Table 3.1 (C) of GSTR 3B for the time being and report similar values in 3.1.1(ii) in order to avoid such confusion.
This article discusses how restaurant services are supplied through ECO and how GST returns are filed by restaurants.