CBIC Circular 240/34/2024 dt. 31st December 2024

The circular clarifies the treatment of ITC for electronic commerce operators (ECOs) under Section 9(5) of the CGST Act, 2017

ECOs are not required to reverse proportionate ITC on inputs and input services for supplies under Section 9(5), including services other than restaurant services. While tax liability under Section 9(5) must be paid entirely in cash, ITC on related inputs and services can be utilized for discharging tax liability on the ECO’s own services. 

The circular extends the principles from a previous clarification (Circular No. 167/23/2021) and emphasizes uniform implementation.

Source : https://taxinformation.cbic.gov.in/view-pdf/1003254/ENG/Circulars