Uber, others seek clarity on GST after conflicting rulings
Uber have approached the finance ministry, Goods and Services Tax Council and the Authority for Advance Rulings (AAR) seeking clarity on whether their business was liable to tax or not.
The move follows a decision from the Karnataka AAR that held that Bengaluru-based direct-to-driver app Namma Yatri was not liable to pay GST. The AAR, in the case of Juspay Technologies that runs the Namma Yatri mobility platform, relied upon the dictionary meaning of the word «through» and held that the mere act of linking service providers with customers through a digital platform did not constitute a supply of service and thus not liable to tax.
Section 9(5) of the Central Goods and Services Tax Act, 2017 specifies that liability of GST on certain services has to be discharged by an electronic commerce operator if the services are supplied 'through" its platform. The Karnataka AAR held that as Namma Yatri was merely connecting the auto driver and passenger and its role ended on such connection, the supply was happening independent of its online application and, accordingly, Section 9(5) did not apply on it.
The same Karnataka authority in the case of Opta Cabs Pvt Ltd had given an opposite ruling. In another recent ruling, the Tamil Nadu Advance Ruling Authority, in the case of Balat Enterprises Pvt Ltd, held that the applicant that provides a platform for small business owners to connect with customers was liable to discharge tax liability under Section 9(5) on the specified services. Other players now want clarity on use of
