GST impact on Ola, Uber or taxi – Ecommerce operator to pay GST instead of Cab drivers

Introduction

The Government of India via notification no.17/2017, states that GST on services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle shall be paid by the operator itself and not by the drivers. This comes as a big relief to a large number of taxi drivers who were worried about the GST impact on them.

The community of drivers who earn their daily bread and butter from ola and uber has finally something to cheer. Due to this decision of the government, the drivers shall not be required to register under GST and further they even don’t have to bother about GST compliances.

Meaning of radio taxi

“Radio taxi” means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS).

In simple words, companies who operates this function via technology like Ola, Uber are covered under this definition.

Meaning of ecommerce operator under GST

As per section 2(44), Electronic commerce means the supply of goods or services or both including digital products over digital or electronic network. Companies like Uber, Ola fall under these categories of GST.

How invoicing shall be done by Ola, Uber under GST

The decision on how to charge the GST shall depend upon the companies pricing policy. If they intends to offer all inclusive price, Rs.7 per KM (taxes included), then drivers shall have to bear the additional burden if company passes it on them. However, the companies may set prices exclusive of taxes to pass on the tax on the cab consumer; however that will result into fare increase which may hamper demand.

Conclusion

In case you have any query, kindly write to us at info@hubco.in.

Related Links:

• GST Registration
• GST Return Filings
• Outsource GST Compliances

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