GST Collection and Deposit

Notification no. 17/2021

Central Tax (rate) was issued on 18 November 2021. This communication is intended to inform you about the implications of the above-mentioned GST notification applicable from 01 January 2022.

We wish to bring to your attention the latest Notification No. 17/2021 dated November 18, 2021 issued by Central Board of Indirect Tax and Customs (CBIC) through which the e-commerce operator (ECO) is now made liable to pay GST on “restaurant services” provided through the e-commerce platform. Note that this change is not applicable for restaurant services provided from a premise with declared tariff of Rs. 7,500/- or above per day. At present, this provision shall be effective from January 01, 2022.

Bytster Technologies Private Limited (hereinafter referred to as “BTPL” or “HungerBay” or “the company”) qualifies as an “ecommerce operator” under Section 2(45) of Central Goods and Services Tax Act, 2017. Therefore, based on the above notification read with Section 9(5) of CGST Act, 2017, HungerBay will be responsible to pay GST on restaurant services provided through its website / app from January 01, 2022.

In this regard to comply with the above change, Bytster Technologies Private Limited (hereinafter referred to as “BTPL” or “HungerBay” or “the company”) is classified as an ECO as per the applicable provisions of the GST law and is required to bifurcate the eateries operating on its platform into two broad categories as below:

1. Restaurant:

As per Notification No.11/2017 - Central Tax Rate F.No.354/117/2017-TRU dated 28th June, 2017, restaurant services” is defined as “Restaurant service means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied”.

A restaurant is a place which is in the business of preparing and serving food in the premises or as takeaway. An illustration under this category is provided below:

a) Restaurants located in a premise where declared tariff is not exceeding Rs. 7,500 per day and providing restaurant services;

b) Food and beverage sold as a part of restaurant services and which qualifies as restaurant services;

c) Cloud kitchens providing restaurant services; etc

d) Stand alone restaurants which are not ice cream parlors or bakeries.

As per Notification No. 17/2021 dated November 18, 2021, HungerBay shall be responsible

Restaurants having GST Number:

HungerBay will directly deposit the GST on your behalf to the GST department, you no longer are required to deposit the GST for sales made from BTPL platform. (GST which was given directly to stores as a part of settlement after deduction of TCS will no longer be sent rather BTPL will deposit these taxes on directly to the GST department)

Restaurants having no GST Number:

HungerBay shall be responsible for charging, collecting and paying GST @ 5% on the total order value. HungerBay will also disclose such payment made in the GST returns as prescribed by CBIC.

2. Non-restaurant:

Shops / suppliers supplying other edible goods which do not qualify as “restaurant services” shall fall under this category. Some of the example under this category is:

a) Standalone ice cream parlor who is not supplying “restaurant services”;

b) Standalone bakery who is not supplying “restaurant services”;

c) Sweet shops who is not supplying “restaurant services”;

d) Standalone chocolate shop who is not supplying “restaurant services”

e) Restaurants in hotels where the declared tariff of any accommodation unit is more than INR 7500/-

Note : the above list is not exhaustive and is merely illustrative for the purpose of understanding the definition of non-restaurant basis interpretation of press releases and various notifications issued by the government of India in relation to GST.

Such suppliers will continue to charge and pay applicable GST as per their current practice. These suppliers will have to mandatorily get themselves registered under GST in line with Section 24 of the CGST Act, 2017. HungerBay shall only be responsible to deduct and pay tax collected at source (TCS) under section 52 of the CGST Act 2017 at the rate of 1%. Note that there is no change in the process of collection and payment of GST for such suppliers falling under this category.

In addition to the above two categories, given that there are eateries which provide both restaurant and non-restaurant supplies on the platform from the same RID, we have come up with a separate category as below.

3. Hybrid

In case where a supplier is involved in providing “restaurant services” and supplying other goods that does not qualify as “restaurant services”, such supplier will be categorised under ‘hybrid model’.

Such supplier will have to bifurcate the “restaurant services” and other goods supplied through ECO. GST on “restaurant services” provided through HungerBay shall be paid by HungerBay and applicable GST on goods supplied through HungerBay shall be continued to be paid by the supplier.

Note that these suppliers will have to mandatorily get themselves registered under GST in line with Section 24 of the CGST Act, 2017 as no turnover threshold shall be applicable for supply of goods through e-commerce operators.

Further, HungerBay shall also be responsible to deduct and pay tax collected at source (TCS) under section 52 of the CGST Act 2017 at the rate of 1% on the value of other goods supplied through HungerBay’s platform.

Clarification for compliance provided by Government in Circular Number 167/23/2021-GST dated 17 December 2021

1. Reporting and compliance for stores falling under Type 1 (Restaurants)

HungerBay shall be responsible for charging, collecting and paying GST @ 5% on the total order value.

Reporting:

• HungerBay Reporting

  • GSTR-1 : Table 7A(1) - Taxable supplies (Net of debit notes and credit notes) to unregistered persons

  • GSTR-3B: Table 3 - To be shown as outward supplies

• Restaurants Reporting

  • GSTR-1 : Table 8 - Nil rated, exempted and non GST outward supplies

  • GSTR-3B: Table 3.1 (c) - Other outward supplies (Nil rated, exempted)

2. Reporting and compliance for stores falling under Type 2 (Non - Restaurants)

HungerBay shall only be responsible to deduct and pay tax collected at source (TCS) under section 52 of the CGST Act 2017 at the rate of 1%.

Reporting:

• HungerBay shall remit TCS to the respective Central Government and State Government/Union Territory and such remittance(s) shall be considered as complete fulfillment of HungerBay's obligations in this regard. The Restaurant Partner may be eligible to claim TCS credit on the basis of tax returns filed by it with the relevant government/statutory/tax authorities.

3. Reporting and compliance for stores falling under Type 3 (Hybrid)

GST on “restaurant services” provided through HungerBay shall be paid by HungerBay and applicable GST on goods supplied through HungerBay shall be continued to be paid by the supplier.

Reporting:

• Please read points 1 & 2 above as both will apply.