Yatri Sathi App Developer fits into e-commerce Operator Category u/s 2(45) of GST Act: AAR [Read Order]

The Authority For Advance Ruling, West Bengal ( AAR ) ruled that the Developer of Yathri Sathi app, an intermediary enabling ride-hailing service between drivers and customers is an “electronic commerce operator” as per Section 2(45) of the Goods and Services Tax (GST) Act, 2017. The Application for Advance Ruling was filed by Natural Language Technology Research (NLTR), a non-profit organization engaged by the Department of Information Technology and Electronics, Government of West Bengal to conduct research and development of language tools & technology, and in the expansion of Online Literary & Linguistic Resources. As per the directives of the Government of West Bengal, the Applicant developed a website and allied mobile application by the name of “Yatri Sathi Mobile App" (App), built as per the common network standards required by the Open Network for Digital Commerce (ONDC) platform. The App is a ride–hailing platform serving as an intermediary between drivers willing to provide cab services and customers who seek to avail the same. A key query raised by the Applicant before the AAR was whether the Applicant falls under the purview of an e-commerce operator as defined by Section 2(45) of the GST Act. Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here The working model of the App requires interested drivers to register themselves with the Applicant by means of a one-time subscription fee; the drivers are then required to entirely conduct the process of cab service to registered customers and directly receive remuneration thereof, determined by the West Bengal Transport Department. It was averred by the Applicant that for an entity “to qualify as an electronic commerce operator as per the provisions of Section 2(45) read with Section 2(44) of the GST Act, a person must meet the criteria of owning, operating, and managing a digital or electronic platform and that such platform must be created for the supply of goods or services, or both, over an electronic network, which constitutes electronic commerce.” NLTR further submitted that they have explicitly disclaimed responsibilities for the services rendered by the drivers, and merely facilitates the sharing of information between drivers and customers for transport services, thus not including the supply of goods or services over an electronic network, which constitutes electronic commerce. The two-member Bench of AAR composed of Tanisha Dutta, Joint Commissioner, CGST & CX and Joyjit Banik, Additional Commissioner, SGST observed that, the definition of an ‘electronic commerce operator’ under Section 2(45) of the GST Act, 2017 encompasses any person who is an owner or operator of digital or electronic facility or platform or one who manages such platform for supply of goods or services or both, including digital products, i.e. a platform which in common parlance is said to be an electronic commerce platform can be said to be an Electronic Commerce Operator. Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here In light of such observation, the Bench ruled that the applicant, being the owner and developer of the App providing ‘supply of services’ permitting drivers to avail the functions of the cab-hailing app in lieu of payment of consideration (one-time subscription fees) qualifies to be an Electronic Commerce Operator under Section 2(45) of the GST Act, 2017. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates