Auto rickshaw service offered through e-commerce platform to attract 5% GST
Automated rickshaw services offered through e-commerce platforms will attract 5% GST from January 1, 2022. The Department of Revenue under the Ministry of Finance, through an announcement on November 18, Withdrawal of GST exemption for auto trailers providing passenger transport services through electronic commerce platforms.
Although passenger transport services provided by auto rickshaw drivers through offline/manual mode will continue to be tax-free, such services when provided through any merchant platform e-commerce will be taxed at 5% effective January 1, 2022.
“This amendment will have a direct impact in the event that players in the e-commerce industry provide an online platform for a large number of rickshaw drivers to connect with motorists. The commerce industry electronics have established a very important position in the market when it comes to facilitating passenger transport services through cheaper, convenient and flexible way of booking trips.
EY India tax partner, Bipin Sapra, said: “The newly inserted provision will make trips booked through the e-commerce platform more expensive, thus creating a tax differential for the same amount. services when provided through offline versus online mode”.