NEW DELHI: If you book an auto Rickshaw from Uber or Ola, you have to pay more money as the revenue department says that auto-rickshaw services provided through e-commerce platforms would attract 5 per cent GST from January 1, 2022.
In a notification dated November 18, the government withdrew the GST exemption available to auto rickshaws providing passenger transport services through e-commerce platforms. Earlier, all auto rickshaw services were exempt from GST.
Passenger transport services provided by auto rickshaw drivers through offline/ manual mode would continue to be exempted, such services when provided through any e-commerce platform would become taxable at 5 per cent effective January 1, 2022.
Experts say that this amendment shall have a direct impact in the case of e-commerce industry players who provide an online platform to a large number of auto rickshaw drivers for connecting with riders. "E-commerce industry has established a very crucial place in the market when it comes to facilitating passenger transport services owing to its cheaper, convenient and flexible manner of booking rides," EY India Tax Partner Bipin Sapra said.
"The newly inserted provision would render rides booked through e-commerce platform costlier thereby creating tax disparity for the same service when provided through offline vis--vis online mode," he added.
Recently there are many regulatory items that have been exempted from GST, either by industry demand or due to COVID-19 making it a complicated for the government to raise tax collection. In the last GST council meeting, the council was in favour of slowly withdrawing many exemptions. So far, GST is not levied on nearly 140 goods and over 75 services.