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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.
“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-à-vis online mode,” EY India Tax Partner Bipin Sapra said.
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