XYZ Pvt. Ltd., Nagpur, provide housekeeping services. The company supplies its services exclusively through an E-commerce website owned and managed by Elixir Technology Pvt. Ltd., Nagpur. The turnover of XYZ Pvt. Ltd. in

As per Section 22 of Central Goods and Services Tax Act, 2017, every supplier of goods or services or both is required to obtain registration in the State or Union Territory from where he makes a taxable supply if his aggregate turnover exceeds the threshold limit in a financial year. However, Section 24 of Central Goods and Services Tax Act, 2017 enlists certain categories of persons who are mandatorily required to obtain registration, irrespective of their turnover. Persons who supply goods or services or both through such Electronic Commerce Operator (ECO), who is required to collect tax at source under section 52, is one such person specified under clause (ix) of Section 24. However, where the ECO is liable to pay tax on behalf of the suppliers of services under a notification issued under Section 9(5), the suppliers of such services are entitled for threshold exemption. Section 2(45) defines ECO as any persons who owns, operates or manages digital or electronic facility or platform for electronic commerce. Electronic commerce is defined under section 2(44) to mean the supply of goods or services or both, including digital products over digital or electronic network. Since Elixir Technology Pvt. Ltd. owns and manages a website for e commerce where both goods and services are supplied, it will be classified as an ECO under Section 2(45). Notification No. 17/2017 Central Tax (Rate) dated 28.06.2017 issued under section 9(5) specifies services by way of housekeeping, except where the person supplying such service through ECO is liable for registration under section 22(1), as one such service where the ECO is liable to pay tax on behalf of the suppliers. In the given case, XYZ Pvt. Ltd. provides housekeeping services through an ECO. It is presumed that Elixir Technology Pvt. Ltd. is an ECO which is required to collect tax at source under section 52. However, housekeeping services provided by XYZ Pvt. Ltd., which is not liable for registration under section 22(1), as its turnover is less than ₹20 lakh, is a service notified under section 9(5). Thus, XYZ Pvt. Ltd. will be entitled for threshold exemption for registration and will not be required to obtain compulsory registration even though it supplies services through ECO. In the second case, XYZ Pvt. Ltd. sells readymade garments through ECO. Such supply cannot be notified under section 9(5) as only supplies of services are notified under that section. Therefore, in the second case, XYZ Pvt. Ltd. will not be entitled for threshold exemption and will have to compulsory obtain registration in terms of section 24(ix).