Use Ola, Uber’s auto booking service? Get ready to pay 5% GST from next year

Customers will have to 5% GST on all auto-rickshaw services provided through e-commerce platforms.

New Delhi: Auto-rickshaw services provided through e-commerce platforms would attract 5 per cent GST from January 1, 2022. The Revenue Department under the Finance Ministry through a notification dated November 18 withdrew the GST exemption available to auto-rickshaws providing passenger transport services through e-commerce platforms.

While the passenger transport services provided by auto rickshaw drivers through offline/ manual mode would continue to be exempt, such services when provided through any e-commerce platform would become taxable at 5 per cent effective January 1, 2022.

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. Also Read: A bumper IPO makes THIS IIT-M alumnus India's newest billionaire

"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-a-vis online mode," EY India Tax Partner Bipin Sapra said. Also Read: 7th Pay Commission: Central govt employees could get salary hike ahead of New Year, check how