The Hon'ble SC has issued notice to the centre in the case of Pradeep Goyal vs Union of India seeking a mechanism to track GST paid by OIDAR service providers (Facebook, Google, Amazon, etc.).
The petitioner, Mr. Pradeep Goyal has contended that the Government has no mechanism to track total GST paid on the Online Information and Database Access or Retrieval (OIDAR) services used by Non-Taxable Online Recipient (NTOR) Indian recipients under a reverse charge basis. The petitioner has further said that figures of revenue generated out of services provided to Non-NTORs are not reported anywhere in GST returns, while there was a detailed procedure for information to be submitted regarding a B2C transaction, there is none for a B2B transaction.
Such figures are not reported in GST returns, it said, since most of these entities such as Facebook, Amazon and Netflix have no permanent establishments in India and maintain their accounts in foreign jurisdictions and are audited in those jurisdictions.
The government of India has no control or access to their accounting records to verify compliance under GST law, it further stated. GST authorities have no data on the number of such persons in a non-taxable territory providing OIDAR services in India.
Through the petition, petitioner also prayed for direction to overseas service providers to have fixed establishment in India or allow the Indian authorities to have no control or access to their accounting records in order to verify their compliance under GST laws.
The three-judge bench has issued notice to the Centre on the plea which seeks to amend GSTR-5A or introduce a new form to reflect in the GST return figures of revenue generated out of services to NTOR.
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