Taxi aggregators are liable to pay GST on services provided by taxi drivers through their mobile apps: AAR
Facts: M/s Opta Cabs Private Limited, is in the business of Taxi Aggregation Service and Taxi Service, where billing is done in the name of the Taxi Driver who provides the service for the particular trip and the taxi driver would collect the amount from the customer on the completion of the trip. The applicant shall neither collect the amount on behalf of the taxi driver nor collect any charges including trip commission, but only collects service charges for usage of IT services which he would have provided from his end. i.e. Mobile App and Billing related services.
Issues Involved: Whether the money paid by the customer to the driver of the cab for the services of the trip is liable to GST and whether the applicant company is liable to pay GST on this amount?
Held: The Hon’ble AAR, Karnataka vide Advance Ruling No. KAR/ADRG 14 OF 2018 dated July 27, 2018, held that the applicant is liable to tax on the amounts billed by him on behalf of the taxi operators for the service provided in the nature of transportation of passengers through it, in accordance with the provisions of Section 9(5) of the CGST Act, 2017 read with Notification No. 17/2017 –Central Tax (Rate) dated June 28, 2017 and the provisions of Section 9(5) of the Karnataka Goods and Services Tax Act 2017 read with Notification No. 17/2017 –State Tax (Rate) dated June 28, 2017.
Citation :  96 taxmann.com 248 (AAR-KARNATAKA)