A Bengaluru-based startup has filed an appeal questioning a July 27 judgment by GST authorities in Karnataka which said app-based taxi aggregators must pay GST on trip fares collected by private taxi drivers/owners connected to their e-commerce platforms.
Opta Cabs, a startup that prepares to use app-based cab hailing services, has preferred an attract the judgment by the GST Authority on Advance Judgment in Karnataka. Its creator Chandrakaladhar Reddy (44) stated: “This sort of guidelines impose substantial legal expenses, and create an entry barrier for startups like us. The policy needs to change.”
Sections of GST professionals believe the GST policy needing aggregators to pay GST on fares collected by cab motorists will injure start-ups as “it affects their liquidity and increases their operational dangers and costs.”
The arrangements of law and alerts are harmful to the interest of e-commerce gamers, particularly start-ups, taken part in business of supplying taxi hire services through market design, stated M.A.Maniyar, GST specialist and previous Deputy Commissioner of Commercial Taxes, Karnataka. A former tax commissioner, not going to be determined, too felt the GST policy approach appeared to skew in favor of deep-pocketed aggregators, and not budding platforms.PV Srinivasan
, a coach for indirect tax professional committee at Bangalore Chamber of Industries & & Commerce (BCIC), felt the GST policy, in this case, militates versus the government’s policy of encouraging self-employment. “The policy looks inequitable against little business owners, and enforces a tax cost on e-commerce cab aggregators on a factor to consider that they do not gather.”
The GST legislation has actually indirectly led to removing the advantage of the GST exemption offered to individual/small taxi operators for annual turnovers below Rs 20 lakh, said Vivek Pachisia, tax partner at EY. According to Maniyar, aggregating the fare collected by all the taxi drivers/owners and subjecting the same to tax at the hands of the e-commerce operator is unreasonable.Like it does with e-commerce merchants, the GST policy might have asked app-based cab aggregators too to collect 1% TCS(tax gathered at source), rather of moving the entire problem on the e-commerce company, Srinivasan said.”When the transport sector is currently paying high taxes with fuel price steadily increasing, I think if this extra GST on e-commerce platforms needs a relook.”EY’s Pachisia, however, said the government has in a method broadened the tax-base by indirectly consisting of even little company within the GST web because they supply the services through an e-commerce platform while the very same service would not be taxable if they were to provide it without platform support.” Eventually, the impact of GST is borne by the consumers and taxi-operators and not e-commerce platform operator,”he said.HG Kumar, former Additional Commissioner of Transportation, Karnataka, clarified that small e-commerce gamers with less than 100 taxis can operate simply with a radio taxi license while those above 100 taxis require aggregator license. Just Uber, Ola and Utto have actually taken aggregator license in Karnataka.An Uber spokesperson, in an e-mail, said:”Basis the legal requirements as stated and verified with the concerned authorities, Uber ensures
GST compliant receipts are created for every journey taken. Independently, as a company, Uber likewise makes the pertinent GST payments and adhere to the requirements and essential disclosures. ” XaTTaX– World Class Automated eSolution for Return filing and e-Waybill Source: economictimes.indiatimes