If an outstation dealer at a numismatic exhibition has not taken CTP registration — what are the GST liabilities of the organiser?

The Section 122(1B) penalty — does it apply to a physical organiser?

Section 122(1B) of the CGST Act imposes a penalty on an 'electronic commerce operator' who: (i) allows a supply of goods through it by an unregistered person (other than persons exempted from registration); or (ii) allows an inter-state supply of goods by a person not eligible to make such supply. The penalty is ₹10,000 or the tax amount, whichever is higher.

The critical question: is a numismatic exhibition organiser an 'electronic commerce operator'? The answer, based on the CGST Act definition, is no. Section 2(45) defines an e-commerce operator as 'any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.' A physical exhibition hall in Delhi, with stalls, displays, and face-to-face transactions, is not a digital or electronic facility. The Section 122(1B) penalty was designed for online platforms like Amazon, Flipkart, and similar digital marketplaces — not for physical event organisers.

This is an important distinction. The finance ministry's amendment of Section 122(1B) in Budget 2024 — which restricted its applicability specifically to 'electronic commerce operators required to collect tax at source under Section 52' — makes this even clearer. A physical exhibition organiser is simply not within the scope of this provision.

What the organiser is liable for — their own obligations

The organiser's GST obligations are personal to the organiser: collecting and remitting GST on their own stall rental income (a taxable service at 18%); maintaining records of the stall fees collected; filing their own GST returns. If the organiser receives stall fees from dealers — registered or unregistered — and does not properly account for these in their own GST returns, that is the organiser's own GST violation, independent of whether the dealers are CTP-registered.

Additionally, if the organiser collected any payment on behalf of unregistered dealers — acting informally as a payment intermediary without a formal agency arrangement — this creates a separate and serious problem. The organiser would be receiving money that relates to taxable supplies made by unregistered persons, without any authorisation to do so, and without issuing proper tax invoices. This puts the organiser in the position of an unregistered de facto agent — an undefined and uncomfortable legal position.

The inquiry exposure — being drawn into the dealer's GST proceedings

When GST officers discover that an outstation dealer sold at a numismatic exhibition without CTP registration, their investigation follows a standard path: they identify which exhibition, who organised it, what the stall allocation records show, and what the dealer's sales were. The organiser becomes a witness and a document source in this investigation — not a target, but an involved party.

Officers may visit the organiser and request: the list of all stall holders at the exhibition; the stall allocation letters issued to each dealer; the fees collected from each dealer; and any records of goods movement (e-way bills related to the exhibition). An organiser who maintained proper records — a complete stall holder register with each dealer's name, address, home-state GSTIN or reason for not being registered, and goods category — will respond to this inquiry efficiently. An organiser with no records faces a more disruptive investigation.

The Section 125 general penalty — residual exposure

Where no specific penalty provision applies to a particular conduct, Section 125 of the CGST Act provides a general penalty of up to ₹25,000 for contravening any provision of the Act or rules. If a GST officer determines that an organiser actively facilitated unregistered dealing — by knowingly issuing stall space to dealers who had declared they would not register, by collecting consolidated cash from multiple unregistered dealers and passing it on informally, or by explicitly advising dealers that they need not register — the officer may invoke Section 125 against the organiser for aiding a violation of the registration requirement.

Section 125 requires mens rea (knowledge of the wrongdoing) — a passive organiser who simply did not know their dealer was unregistered does not face this exposure. An organiser who was told by the dealer they would not register and said nothing faces a much greyer position.

The reverse charge mechanism — does it apply to the buyer?

When a registered person receives goods from an unregistered supplier, the reverse charge mechanism (RCM) under Section 9(4) of the CGST Act may apply — the registered buyer pays GST on behalf of the unregistered supplier. However, Section 9(4) has been significantly modified and its broad applicability to all supplies from unregistered persons was suspended and has been applied selectively through notifications. As of current GST law, RCM under Section 9(4) does not apply automatically and universally to all purchases from unregistered persons — it applies only to specific notified categories of supplies.

For a numismatic collector who bought notes at an exhibition from an unregistered dealer: the RCM obligation depends on whether the buyer is a registered person and whether the supply category attracts RCM under current notifications. For most individual collector buyers (who are themselves unregistered), the RCM question does not arise. For a registered dealer buying from an unregistered seller at an exhibition: they should verify whether their specific purchase attracts RCM under current notifications and consult a GST professional.

What a responsible organiser should do before the exhibition

A well-organised numismatic exhibition should have a pre-event GST compliance process for all outstation stall holders. This protects the organiser, protects the dealers, and ensures the exhibition runs without GST disruption:

Collect registration declarations: require every outstation stall holder to declare either their home-state GSTIN (for same-state registered dealers adding the exhibition as additional place of business), their CTP registration number (for out-of-state or unregistered dealers who obtained CTP), or a signed declaration that their sales will be below the CTP threshold and they are not making inter-state supplies. This declaration puts the responsibility for accuracy firmly on the dealer.

Provide the booth allotment letter promptly: as established in Q — GST‑ORG, this document is what dealers need for their CTP application. Issue it at least 10 days before the exhibition to give dealers time to register.

Display GST compliance notices: post a notice at the exhibition entrance and at stall registration: 'Outstation dealers making taxable supplies are required to hold CTP GST registration. The organiser is not responsible for individual dealer GST compliance.'

Maintain a stall holder register: record each dealer's name, address, home-state GSTIN or CTP number, goods category, and declaration status. This register is the organiser's primary protection in any subsequent GST inquiry.

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If GST officers arrive at the exhibition and discover unregistered dealers selling without CTP registration: the direct penalty and tax liability falls on the unregistered dealer (Section 122 of CGST Act). The organiser faces inquiry exposure and must produce their stall holder records. An organiser with complete records — including each dealer's GST declaration — responds efficiently. An organiser with no records faces a disruptive and potentially prolonged investigation. Maintain the stall holder register.

Party	Direct GST liability	Indirect exposure	Prevention
Unregistered dealer (primary liability)	GST unpaid on all exhibition sales + §122 penalty (10% of tax or ₹10,000 whichever higher) + interest at 18% p.a.	Recovery proceedings; potential seizure of goods under §129	Take individual CTP registration at least 5 days before exhibition
Organiser (physical exhibition)	None for dealer's GST — organiser is NOT an e-commerce operator under §122(1B)	Inquiry/audit exposure; must produce stall holder records; §125 general penalty risk if organiser actively facilitated unregistered selling	Collect GST declarations from all stall holders; issue allotment letters promptly; maintain stall register
Organiser (if acting as payment intermediary for dealers)	Potential unregistered agent liability; incorrect invoicing risk	GST mismatch; demand + penalty under §122	Do not collect payments on behalf of unregistered dealers without formal consignment agreement
Registered buyer from unregistered dealer	Possible RCM obligation under §9(4) — check current notifications for specific supply category	ITC denial on purchases without valid GST invoice	Verify seller's CTP registration before purchase; obtain GST invoice from CTP-registered seller

Organiser pre-exhibition GST compliance checklist 1. Issue booth allotment letters at least 10 days before exhibition — this is the key document dealers need for CTP application 2. Require every outstation stall holder to submit: home-state GSTIN + CTP number for the exhibition state, OR signed declaration of exemption 3. Maintain a stall holder register: name, address, GSTIN/CTP, goods category, declaration received — one row per dealer 4. Post GST compliance notice at stall registration: 'Outstation dealers must hold CTP registration. Organiser not responsible for individual dealer compliance.' 5. Do NOT collect sales payments on behalf of any dealer informally — only through a formal consignment agency arrangement 6. Brief dealers: refer to GST facilitation centre; distribute one-page CTP registration guide 7. Keep the stall holder register available for inspection — this is your primary protection in any GST inquiry

The organiser's GST position when a dealer fails to register is similar to a landlord's position when a tenant operates an unlicensed business on leased premises. The landlord did not commit the tenant's violation. But if the landlord's records show who the tenant was and what they were doing — the investigation is resolved quickly. If the landlord has no records at all — the investigation becomes the landlord's problem too.

Laws & authorities referenced in this chapter

CGST Act 2017 — §2(45) (e-commerce operator definition: digital/electronic facility — does NOT include physical exhibition organiser)

CGST Act 2017 — §122(1B) (penalty for e-commerce operator allowing unregistered supply — applies to online platforms, not physical organisers)

CGST Act 2017 — §122(1) (penalty for unregistered dealer: 10% of tax evaded or ₹10,000 whichever higher — primary liability on the dealer)

CGST Act 2017 — §125 (general penalty up to ₹25,000 for contravening any GST provision — potential exposure if organiser actively facilitated unregistered selling)

CGST Act 2017 — §9(4) (reverse charge on supplies from unregistered persons — selective application per current notifications)

CGST Act 2017 — §129 (seizure and detention of goods in movement without valid documents)

Finance Act 2024 — amendment to §122(1B) restricting applicability specifically to e-commerce operators under §52 (further confirms physical organisers are outside this provision)

CGST Act 2017 — §24(ii) (each dealer's personal CTP registration obligation — individual, not transferable to organiser)