GST clarification on enter tax credit score for Swiggy and Zomato anticipated quickly

The Authorized Committee, a key physique accountable for decoding and advising on GST-related authorized points, lately held a gathering to reply questions relating to the cancellation of Enter Tax Credit score (ITC) for commerce operators digital (ECO) like Zomato Swiggy.

This follows representations in search of to know whether or not ECOs, comparable to Swiggy and Zomato, are required to waive ITC for companies aside from restaurant provides beneath Part 9(5) of the Central Act on the products and companies tax (CGST Act).

The committee, which incorporates senior officers from the Finance Ministry, Central Board of Oblique Taxes and Customs (CBIC) and tax legislation specialists, has seemed into these considerations and is predicted to problem a draft clarification round quickly.

The difficulty arises from Round No. 167/23/2021-GST, issued in December 2021, which clarifies that ECOs should not required to cancel the ITC when offering a platform for catering companies topic to the tax beneath part 9(5). Nonetheless, ambiguity remained as as to if the identical remedy utilized to different companies specified beneath the identical provision, which gave rise to additional deliberations.

The committee will quickly problem a clarification stating that ECOs required to pay tax beneath part 9(5) for specified companies should not required to cancel ITC for inputs and enter companies associated to those provides. Nonetheless, it’s going to additionally make clear that ITC can’t be used to offset the tax payable for provides made beneath part 9(5) and should be paid in full via the digital money ledger.