Delhi HC Upholds Govt’s GST Notification On….

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The Delhi High Court has upheld the government’s decision to impose Goods and Services Tax (GST) on auto rickshaw rides booked through cab aggregator platforms like Uber and Ola. The court dismissed Uber’s petition challenging the levy of GST and held that the classification of app-based cab aggregators as a separate class of service providers was rational and in line with the GST Act’s provisions. Auto rickshaw aggregators have faced increasing government scrutiny, and many state governments have moved to bring them in line with normal offline autos in terms of taxes. The Karnataka government directed regional transport authorities to levy convenience fees and GST on auto rides booked by passengers through ride-hailing apps in November 2022.

However, there are no guidelines for auto-rickshaws in the vehicle aggregator norms notified by the Centre in 2020, and the states which have formulated local norms have not included either bikes or auto-rickshaws in their aggregator norms, resulting in much friction between the authorities and app-based vehicle aggregators. Uber had argued that there should not be any differentiation in tax treatment between passenger transport services provided by app-based auto drivers and those operating offline. However, the court held that the classification of app-based cab aggregators as a separate class of service providers was rational and in line with the GST Act’s provisions.

The court also stated that the notifications under challenge did not result in discrimination since the classification of e-commerce operators was recognised by the statute.The lack of clear guidelines and regulations for auto-rickshaws in the vehicle aggregator norms notified by the Centre in 2020 has resulted in confusion and friction between the authorities and app-based vehicle aggregators. The absence of specific guidelines for auto-rickshaws has created uncertainty in the industry and made it difficult for authorities to enforce rules and regulations. Moreover, different states have formulated their own local norms, which have not included auto-rickshaws in their aggregator norms, adding to the confusion and difficulties faced by app-based vehicle aggregators. This has led to a need for a comprehensive policy framework to regulate the operations of auto-rickshaws and other forms of transportation.