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Aggregators cite conflicting rulings by the Authority on Advance Ruling (AAR), they said, as recent rulings in Karnataka held divergent views on the applicability of GST on auto-rickshaw rides, while Tamil Nadu 's authority upheld its applicability.
“Contrary advance rulings have created uncertainty in the industry,” Uber said in an emailed response to ET’s query, while disclosing that it has moved the AAR in Karnataka (AAR-KA) seeking clarification. The US-headquartered company has also submitted representations to the Union finance ministry and the state GST authorities requesting clarification and resolution of the tax disparity.
“There has to be predictability and consistency in tax administration to ensure a level playing field for all industry players. In a highly competitive environment, inconsistencies in tax application—such as those arising from the use of creative interpretation, can lead to pricing arbitrage advantages, creating further uncertainty,” the Uber spokesperson. The lack of clarity in other states could lead to varying interpretations, said industry executives. “The confusion exists in all states,” said an executive, who did not wish to be identified.
The confusion was triggered by a recent ruling by AAR-KA saying Rapido must pay GST on services provided by taxi drivers using its app, treating the driver's services as those of Rapido.
“This reverses a previous ruling where companies like Multi-Verse and Juspay Technologies were not held liable to pay GST on such transactions,” said Sadashiv Prasad, a practising chartered accountant, who advises aggregators on the subject. The earlier decision, Prasad said, had benefited both drivers and passengers as drivers were paying GST only on their platform subscription fee.
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