Uber and co want to clarify with the govt if they are liable for GST or not

App-based mobility providers, including Uber, have approached the finance ministry as well as the Goods and Services Tax (GST) Council and the Authority for Advance Rulings (AAR) to clarify whether their businesses are liable for tax or not. This comes after the Karnataka AAR held that Bengaluru-based direct-to-driver app Namma Yatri was not liable to pay GST. 

According to a report in The Economic Times, the Karnataka AAR, upholding the dictionary meaning of the word ‘through’ and held that the mere act of linking service providers with customers through a digital platform “did not constitute a supply or service” and hence is not subjected to tax. 

The AAR held that Namma Yatri was simply connecting the auto driver and passenger and its role ended upon the connection. 

However, this is why the clarification has become necessary. The same AAR had given the opposite ruling in the case of Opta Cabs. Also in another ruling, the Tamil Nadu AAR had stated that connecting small business owners with customers is a service provided, and hence liable for tax, in the case of Balat Enterprises. 

Other players too want to clarify on the use of the word ‘through’ and the tax liability on their services.

An Uber spokesperson confirmed to the daily that they had filed an application for an advance ruling in Karnataka, seeking clarity on GST law. 

The cab aggregator has also written to the finance ministry and the Karnataka GST authorities seeking clarification and resolution of the tax disparity.