Ola, Uber & Rapido to Govt: Let’s Clear the Air on GST for Drivers

Ola, Uber, and Rapido are asking the government for some much-needed clarity on how GST applies to their new subscription-based business model. If you’ve noticed changes in how these apps charge drivers, you’re not alone—here’s what’s going on.

 

What’s changing?

Instead of taking a commission from every ride, these companies now let drivers pay a flat daily or monthly fee (like a subscription). In return, drivers keep all their earnings from rides. This model is called Software as a Service (SaaS).

 

Why is there confusion?

The problem started when different states gave different rulings. For example, Namma Yatri was told it didn’t have to pay GST on its SaaS model, but Uber and Rapido were told they did—even though they’re all doing pretty much the same thing. This has made things unfair and confusing for everyone involved.

 

Why does it matter?

If one company has to pay GST and another doesn’t, it can make rides more expensive on some platforms and cheaper on others. That’s not just tough for the companies, but also confusing for drivers and customers.

 

What are the companies doing about it?

Ola, Uber, and Rapido are taking their concerns to the Central Board of Indirect Taxes and Customs (CBIC), hoping to get a single, clear rule that applies to everyone. The government is thinking about updating the GST law to fix the issue, but nothing’s final yet.

 

What’s next?

The GST Council might discuss this in their next meeting. Until then, everyone in the industry is waiting to see how the rules will shake out.

 

Source: Economic Times, Moneycontrol, Outlook Business, CNBC-TV18, eFiletax