Section 9(5) of the Central Goods and Services Tax Act, 2017 (CGST Act) deems the electronic commerce operator — not the actual supplier — liable to pay GST on notified services: passenger transport, hotel accommodation, housekeeping, restaurant service from 1 January 2022, and local delivery from 22 September 2025. For every other platform supply the operator instead collects tax at source under Section 52 and files FORM GSTR-8.
Background — two mutually exclusive regimes on one platform
A marketplace in India carries two different GST characters on the same day. On a notified service it is a deemed supplier under CGST Section 9(5) (and Section 5(5) of the Integrated Goods and Services Tax Act, 2017): it raises the invoice, reports the transaction as its own outward supply, and pays the whole tax. On everything else it is a collection agent under Section 52: the seller remains the supplier and the platform withholds a small percentage and reports it so the seller can claim credit.
Getting the boundary wrong is expensive in both directions. Treat a Section 9(5) service as a TCS supply and the platform under-declares output tax. Treat a TCS supply as Section 9(5) and it over-declares, while the seller simultaneously declares the same supply. CBIC has drawn the line through a chain of rate notifications amending Notification No. 17/2017-Central Tax (Rate) and three circulars under Section 168(1) CGST Act. This explainer covers the Central-level framework only; state notifications, Advance Ruling orders and Appellate Tribunal decisions are outside scope.
The §9(5) notified categories, and how the list grew
CGSTR_17_2017, effective 1 July 2017, is the principal Section 9(5) notification. It began with two categories: passenger transport by radio-taxi, motorcab, maxicab and motor cycle (with "radio taxi" defined as a GPS/GPRS-enabled taxi in two-way radio contact with a central control office, and the vehicle terms taking their Motor Vehicles Act, 1988 meanings); and accommodation in hotels, inns, guest houses, clubs, campsites and other commercial lodging places, except where the supplier is itself liable for compulsory registration under Section 22(1). CGSTR_23_2017 added housekeeping services — plumbing, carpentering and similar — supplied through an operator, on the same not-otherwise-registrable condition.
Three later amendments reshaped the list:
| Effective | Change | Notification |
|---|---|---|
| 1 Jan 2022 | Passenger transport extended to omnibus and any other motor vehicle; restaurant service other than from specified premises brought in | CGSTR_17_2021 |
| 20 Oct 2023 | Omnibus removed from the catch-all and given a new clause, excluding company operators — a company running omnibuses through a platform pays its own GST | CGSTR_16_2023 |
| 22 Sep 2025 | New clause (v): local delivery services, except where the supplier is liable for registration under Section 22(1) | CGSTR_17_2025 |
The 2025 addition is the one most platforms are still absorbing. CGSTR_17_2025 brings quick-commerce and hyperlocal delivery into Section 9(5) for delivery partners who are not compulsorily registrable — the platform pays their GST. Delivery partners who are registrable continue to invoice and pay themselves. The companion CGSTR_15_2025 also excluded operator-run local delivery from the goods transport agency definition, closing the GTA-versus-platform classification argument.
The specified-premises boundary decides restaurant-aggregator liability. CGSTR_17_2021 originally defined specified premises by declared tariff above ₹7,500 per unit per day. CGSTR_05_2025, effective 1 April 2025, retired the declared-tariff trigger and substituted a three-path test: actual supply value above ₹7,500 per unit per day in the preceding financial year; an opt-in declaration in Annexure VII filed between 1 January and 31 March of the preceding year; or an opt-in in Annexure VIII within 15 days of the registration ARN, with Annexure IX for opting out. CGSTR_08_2025 aligned the Section 9(5) notification to that definition. Specified premises attract 18% with credit; non-specified premises 5% without. Practically: a restaurant inside a premium hotel invoices and pays its own GST on aggregator orders; a standalone restaurant does not — the aggregator does.
The cloud-kitchen question follows the same logic rather than a separate rule. A cloud kitchen supplying prepared food through an aggregator supplies restaurant service; unless it sits in specified premises, the aggregator carries the Section 9(5) liability. Where a kitchen instead sells packaged manufactured food as goods, the transaction is a supply of goods and falls back into the Section 52 TCS track.
§52 TCS, GSTR-8 and the supplier's credit
For every platform supply outside Section 9(5), Section 52 CGST Act applies. CGST_52_2018 set TCS at 0.5% of the net value of intra-State taxable supplies — matched by 0.5% under the State or Union Territory law — and IGST_02_2018 set 1% for inter-State supplies. Both rates were halved with effect from 10 July 2024 by Notification No. 15/2024-Central Tax and Notification No. 01/2024-Integrated Tax, to 0.25% CGST plus 0.25% SGST/UTGST and 0.5% IGST. "Net value of taxable supplies" is aggregate taxable supplies made through the platform less returns within the same tax period.
The operator files FORM GSTR-8 monthly and remits the collected amount. The collection then flows to the supplier: it appears in the supplier's statement and is credited to the supplier's electronic cash ledger, from where it is claimed in the supplier's return. Reconciling GSTR-8 against supplier-side reporting is the single most common source of platform-side notices, because a mismatch surfaces on both parties' dashboards.
CIR_194_2023 settles TCS allocation where two operators sit in one transaction, as on the Open Network for Digital Commerce (ONDC), and both qualify as operators under Section 2(45). The unifying rule: Section 52 compliance attaches to the operator who finally releases payment to the supplier. Where the seller-side operator is not itself the supplier, the seller-side operator collects TCS and the buyer-side operator has no Section 52 obligation. Where the seller-side operator is the supplier, the buyer-side operator collects while paying it.
Veritect Legal AI — platform GST liability pack
Subscribers query the full verbatim text of Notification 17/2017-Central Tax (Rate) with every amendment in force, the complete eleven-issue framework in Circular 167/23/2021-GST, the ONDC multi-operator settlement scenarios in Circular 194/06/2023-GST, the Annexure VII–IX specified-premises declaration formats, and the eight-condition enrolment regime for unregistered sellers — with a supply-by-supply §9(5)-versus-§52 decision matrix.
Registration, unregistered sellers and composition sellers
Registration is compulsory on both sides of the platform. Section 24(ix) CGST Act compels registration for a person supplying goods or services through an operator required to collect TCS; Section 24(x) compels registration for the operator itself. Neither depends on the Section 22(1) threshold. CIR_167_2021 confirms an operator already registered in FORM GST REG-01 needs no separate registration to discharge Section 9(5) liability.
Three notifications carve out the small-seller and composition cases:
CGST_65_2017exempts service suppliers routed through an operator (where the supply is not covered by Section 9(5)) from registration while turnover stays within ₹20 lakh (₹10 lakh in special-category States).CGST_34_2023, effective 1 October 2023, exempts goods suppliers within the Section 22(1) threshold from registration under Section 23(2), on eight conditions: intra-State goods supply only; e-commerce supply in not more than one State or Union Territory; PAN held; PAN, address and State declared on the common portal; a single enrolment number per State granted before any supply; and cessation of the enrolment number on later formal registration.CGST_37_2023binds the operator side of that scheme under Section 148: allow supply only against an allotted enrolment number, allow no inter-State supply, collect no TCS on those supplies, and still report them in GSTR-8.CGST_36_2023prescribes the parallel special procedure for supplies made through operators by composition taxpayers.
The operator's onboarding logic therefore has to branch on identifier type — GSTIN versus enrolment number — before a listing goes live, and must block inter-State fulfilment for enrolment-number sellers.
The credit rule that cuts both ways
CIR_240_2024, effective 31 December 2024, resolves the input tax credit question for operators across all Section 9(5) categories, extending the restaurant-specific position in CIR_167_2021. Two limbs:
- Favourable — an operator is not required to reverse input tax credit on its own inputs and input services under Section 17(1) or 17(2) CGST Act to the extent of Section 9(5) supplies. Platform, technology and marketing credits remain available against the operator's own service supplies.
- Restrictive — the Section 9(5) tax itself must be discharged entirely through the electronic cash ledger. Credit cannot be set off against it.
CIR_167_2021 fills in the reporting mechanics for the restaurant case, which now reads across: the operator issues the invoice for the Section 9(5) supply; the operator remains liable even if the restaurant is unregistered; the restaurant's own aggregate turnover under Section 2(6) includes platform-routed supplies (so the threshold and composition tests are computed on the gross figure); the platform-routed supply is not an inward supply of the operator on reverse charge; and mixed orders should be billed separately as between the Section 9(5) service and other supplies.
Practitioner implications
Build the branch at the SKU/service level, not the merchant level. A single merchant can generate a Section 9(5) restaurant supply and a Section 52 packaged-goods supply on the same order. Platform tax logic that branches on merchant category will misclassify; it has to branch on the supply.
Re-verify specified-premises status every March. Since CGSTR_05_2025, a restaurant's status can change through actual supply value or through an Annexure VII/IX election filed by 31 March. Aggregators must re-pull declarations annually or they will pay Section 9(5) tax on supplies where the restaurant is also paying.
Split the GSTR-3B cash and credit legs. CIR_240_2024 makes the cash-ledger requirement absolute for Section 9(5) tax while preserving credit on platform inputs. A single blended offset is the classic audit finding here.
Fix the ONDC contract before the tax question arises. CIR_194_2023 allocates Section 52 duty to whoever finally releases payment to the supplier. Inter-operator agreements should state the settlement flow expressly, because that flow — not the commercial label — determines who files GSTR-8.
Audit quick-commerce delivery partners against Section 22(1). From 22 September 2025 the platform pays GST for delivery partners who are not compulsorily registrable. That makes partner registration status a live onboarding data field, not a back-office detail.
Frequently Asked Questions
Q: Which services make an e-commerce operator liable to pay GST instead of the supplier?
Those notified under Section 9(5) of the CGST Act, 2017 by Notification No. 17/2017-Central Tax (Rate) and its amendments: passenger transport by radio-taxi, motorcab, maxicab, motor cycle and (with a company carve-out) omnibus; hotel, inn, guest house, club and campsite accommodation where the supplier is not liable for compulsory registration under Section 22(1); housekeeping services such as plumbing and carpentering on the same condition; restaurant service other than from specified premises from 1 January 2022; and local delivery services from 22 September 2025 where the supplier is not liable for registration under Section 22(1).
Q: What is the difference between Section 9(5) liability and Section 52 TCS for a platform?
They are mutually exclusive on the same supply. Under Section 9(5) the operator is the deemed supplier — it invoices, reports the supply as its own outward supply and pays the full GST. Under Section 52 the supplier remains the supplier; the operator only collects tax at source on net value of taxable supplies and files FORM GSTR-8, and the supplier claims that amount as credit. CBIC Circular No. 167/23/2021-GST confirms that once restaurant service moved to Section 9(5) from 1 January 2022, operators stopped collecting TCS on those supplies.
Q: What is the TCS rate an e-commerce operator must collect under Section 52?
Notification No. 52/2018-Central Tax fixed TCS at 0.5% of the net value of intra-State taxable supplies, matched by 0.5% under State or Union Territory law, and Notification No. 02/2018-Integrated Tax fixed 1% for inter-State supplies. Both were halved with effect from 10 July 2024 by Notification No. 15/2024-Central Tax and Notification No. 01/2024-Integrated Tax, to 0.25% CGST plus 0.25% SGST/UTGST and 0.5% IGST. Net value means aggregate taxable supplies less returns within the same tax period.
Q: Does an e-commerce operator need GST registration regardless of turnover?
Yes. Section 24(ix) of the CGST Act, 2017 compels registration for every person supplying goods or services through an operator required to collect tax at source, and Section 24(x) compels registration for the operator itself — both irrespective of the Section 22(1) threshold. CBIC Circular No. 167/23/2021-GST confirms that an operator already registered in FORM GST REG-01 needs no separate registration to discharge Section 9(5) liability.
Q: Can small suppliers sell goods through an e-commerce platform without GST registration?
Yes, within limits. Notification No. 34/2023-Central Tax, effective 1 October 2023, exempts suppliers of goods through a TCS-collecting operator from registration where turnover is within the Section 22(1) threshold, on eight conditions — intra-State goods supply only, supply in not more than one State or Union Territory, PAN held, PAN/address/State declared on the common portal, and one enrolment number per State granted before any supply. Notification No. 37/2023-Central Tax then bars the operator from allowing inter-State supply by such sellers, bars TCS on those supplies, and requires reporting in FORM GSTR-8.
Q: Must a food-delivery platform pay GST on restaurant orders from a hotel restaurant?
Not where the restaurant is in specified premises. Notification No. 17/2021-Central Tax (Rate), effective 1 January 2022, brought restaurant service through an operator into Section 9(5) but excluded restaurants at specified premises — originally hotel accommodation with declared tariff above ₹7,500 per unit per day. Notification No. 05/2025-Central Tax (Rate) replaced that from 1 April 2025 with an actual-supply-value test above ₹7,500 per unit per day plus an opt-in/opt-out declaration in Annexures VII to IX, and Notification No. 08/2025-Central Tax (Rate) aligned the Section 9(5) notification to it.
Q: Can an e-commerce operator use input tax credit to pay its Section 9(5) liability?
No. CBIC Circular No. 240/34/2024-GST dated 31 December 2024 confirms that Section 9(5) tax must be discharged entirely through the electronic cash ledger. The same circular confirms the favourable half: an operator need not reverse input tax credit on its own platform inputs and input services under Section 17(1) or 17(2) of the CGST Act, 2017 to the extent of Section 9(5) supplies, and that credit remains available against tax on the operator's own platform-service supplies.
Sources
- Primary: Notification No. 17/2017-Central Tax (Rate) dated 28 June 2017 — principal Section 9(5) notification (
CGSTR_17_2017) — cbic-gst.gov.in - Notification No. 23/2017-Central Tax (Rate) — housekeeping services under Section 9(5) (
CGSTR_23_2017) — cbic-gst.gov.in - Notification No. 17/2021-Central Tax (Rate) — restaurant service and omnibus from 1 January 2022 (
CGSTR_17_2021) — cbic-gst.gov.in - Notification No. 16/2023-Central Tax (Rate) — omnibus company carve-out from 20 October 2023 (
CGSTR_16_2023) — taxinformation.cbic.gov.in - Notification No. 05/2025 and No. 08/2025-Central Tax (Rate) — specified-premises redefinition and Section 9(5) alignment (
CGSTR_05_2025,CGSTR_08_2025) — taxinformation.cbic.gov.in - Notification No. 17/2025-Central Tax (Rate) — local delivery services from 22 September 2025 (
CGSTR_17_2025) — taxinformation.cbic.gov.in - Notification No. 65/2017-Central Tax — ₹20 lakh exemption for non-§9(5) service suppliers through operators (
CGST_65_2017) — cbic-gst.gov.in - Notification No. 52/2018-Central Tax and Notification No. 02/2018-Integrated Tax — TCS rates under Section 52 (
CGST_52_2018,IGST_02_2018) — cbic-gst.gov.in - Notification No. 34/2023, No. 36/2023 and No. 37/2023-Central Tax — enrolment scheme for unregistered goods sellers, composition-taxpayer procedure and operator obligations (
CGST_34_2023,CGST_36_2023,CGST_37_2023) — cbic-gst.gov.in - CBIC Circular No. 167/23/2021-GST — eleven-issue framework on restaurant service through operators (
CIR_167_2021) — taxinformation.cbic.gov.in - CBIC Circular No. 194/06/2023-GST dated 17 July 2023 — TCS in multi-operator (ONDC) transactions (
CIR_194_2023) — taxinformation.cbic.gov.in - CBIC Circular No. 240/34/2024-GST dated 31 December 2024 — ITC and cash-ledger rule for Section 9(5) supplies (
CIR_240_2024) — taxinformation.cbic.gov.in - Statutory basis: Central Goods and Services Tax Act, 2017 — Sections 2(44), 2(45), 9(5), 17, 22, 23(2), 24, 52, 148, 168(1) on India Code; Integrated Goods and Services Tax Act, 2017 — Section 5(5) on India Code
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Veritect Legal AI carries the complete operational depth behind this brief: full verbatim text of Notification 17/2017-Central Tax (Rate) as amended to date with every clause and Explanation, the eleven-issue compliance framework of Circular 167/23/2021-GST including GSTR-1 and GSTR-3B table mapping, the ONDC multi-operator settlement scenarios of Circular 194/06/2023-GST, the Annexure VII–IX specified-premises declaration formats and filing windows, the eight-condition enrolment regime for unregistered goods sellers with the operator-side special procedure, and a supply-level §9(5)-versus-§52 decision matrix covering ride-hailing, food delivery, cloud kitchens, accommodation aggregation, home services and quick commerce. Built for platform tax heads, marketplace compliance teams and digital-commerce counsel.