ECOs paying Tax u/s 9(5) of CGST Act are Not required to reverse ITC in respect of supply of restaurant services: CBIC Clarifies

The CBIC has clarified that e-commerce operators are not required to reverse Input Tax Credit (ITC) on restaurant services under Section 9(5) of the CGST Act. This clarification comes in response to industry concerns over the tax treatment of restaurant services supplied through e-commerce platforms. The CBIC confirmed that e-commerce operators are entitled to retain their ITC claims for restaurant services provided through their platforms. This move is aimed at reducing the tax burden on e-commerce operators and simplifying compliance for businesses in the hospitality sector. The clarification provides much-needed certainty in the GST treatment of e-commerce transactions involving restaurant services.