CBIC Urges App-Based Ride-Hailing Firms to Clarify GST Applicability on Booked Rides

The Central Board of Indirect Taxes & Customs (CBIC) has urged app-based ride-hailing companies to clarify the applicability of GST on rides booked through their platforms. A high-level meeting led by CBIC Chairman Sanjay Kumar Agarwal discussed the varying business models of companies like Uber, Rapido, and Namma Yatri, which affect GST application. Uber highlighted the lack of uniformity in tax applicability across states, while Rapido raised concerns about GST collection when drivers handle fare collection directly. Namma Yatri argued it should not be subject to GST under Section 9 (5) of the CGST Act, as it only connects drivers with users. The meeting follows a Karnataka High Court directive for CBIC to hear all stakeholders. The core issue revolves around interpreting Section 9 (5) of the CGST Act, which governs GST on services provided through e-commerce operators. The outcome could significantly impact the business models of ride-hailing platforms and GST charges for consumers.