{"id":9485,"date":"2026-06-09T07:01:42","date_gmt":"2026-06-09T01:31:42","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=9485"},"modified":"2026-06-09T07:01:42","modified_gmt":"2026-06-09T01:31:42","slug":"e-commerce-operator-not-liable-for-tcs-when-it-does-not-collect-payments-hc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/e-commerce-operator-not-liable-for-tcs-when-it-does-not-collect-payments-hc","title":{"rendered":"E-Commerce Operator Not Liable for TCS When It Does Not Collect Payments | HC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000419856\/e-commerce-operator-not-liable-for-tcs-under-section-52-where-collections-made-by-gst-registered-entity-hc\">Hiveloop Technology Pvt. Ltd. vs. Additional Director Directorate General of GST Intelligence, Bengaluru (2026) 42 Centax 211 (Kar.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><strong>S.R.Krishna Kumar<\/strong>, J.<\/li>\n<li><strong>S\/Shri Tarun Gulati<\/strong>, Sr. Counsel &amp; <strong>Pradeep Nayak<\/strong>, Adv., for the Petitioner.<\/li>\n<li><strong>Smt. Jyoti.M.Maradi<\/strong>, HCGP &amp; <strong>Shri Jeevan. J. Neeralgi<\/strong>, Adv., for the Respondent.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The petitioner operated a B2B e-commerce platform through which buyers and sellers conducted transactions. During the relevant period, the petitioner merely provided access to the online platform and did not collect consideration, provide logistics, or extend credit facilities. Such services were offered by independent service providers, including a separately incorporated and GST-registered group entity engaged directly by users under independent contracts. The Department issued a show-cause notice under Section 74, alleging failure to collect Tax Collected at Source (TCS) under Section 52 and wrongful availment of input tax credit by not reversing ITC under Section 17(2) in respect of alleged free or non-taxable supplies. The petitioner challenged the notice on the ground that it neither collected consideration nor made exempt supplies and that the invocation of Section 74 was without jurisdiction.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The High Court held that liability to collect TCS under Section 52 arises only when the e-commerce operator collects consideration for supplies made through the platform. Since the petitioner merely provided platform access and did not collect payments, Section 52 was inapplicable. The collections made by a separate GST-registered entity could not be treated as collections made by the petitioner. The Court further held that promotional activities undertaken by the petitioner to expand its own business did not constitute exempt or non-taxable supplies requiring reversal of ITC under Section 17(2). The show-cause notice failed to establish the existence of exempt supplies or any basis for the reversal of ITC. The Court also observed that Section 74 can be invoked only where fraud, wilful misstatement, or suppression of facts with intent to evade tax is specifically alleged. As the notice contained no such allegations and the petitioner was not a person chargeable with tax in respect of the impugned transactions, the invocation of Section 74 was without jurisdiction. Accordingly, the show-cause notice was quashed.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Calcutta Discount Co. v. ITO \u2014 (1961) 2 SCR 241 \u2014 Referred [Para 13]<\/li>\n<li>Dy. CCE v. Sushil &amp; Co. \u2014 (2016) 13 SCC 223 \u2014 Referred [Para 13]<\/li>\n<li>NCN Pearson Inc. v. Union of India \u2014 [W.P. No. 7635 of 2024, dated 16-7-2025] \u2014 Referred [Para 12]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=1997%20(91)%20E.L.T.%20540%20(S.C.)&amp;itemType=AP\">Philips India Ltd. v. CCE<\/a> \u2014 1997 (91) E.L.T. 540 (S.C.) \u2014 Referred [Para 11.4]<\/li>\n<li>State of U.P. v. Mohammed Nooh \u2014 AIR 1958 SC 86 \u2014 Referred [Para 13]<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><em>List of Departmental Clarification Cited<\/em><\/h2>\n<p><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Circular%20No.194%2F06%2F2023-GST&amp;itemType=AP\">Circular No.194\/06\/2023-GST<\/a> dated 17.07.2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Hiveloop Technology Pvt. Ltd. vs. Additional Director Directorate General of&hellip;<\/p>\n","protected":false},"author":19,"featured_media":9494,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-9485","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>E-Commerce Operator Not Liable for TCS When It Does Not Collect Payments | HC<\/title>\n<meta name=\"description\" content=\"HC quashed GST proceedings, holding that an e-commerce operator is not liable for TCS under Section 52 if it does not collect consideration.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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