Booking Auto via Ola-Uber? Get ready to pay 5% GST

While passenger transportation services provided by auto-rickshaw drivers in manual or offline mode will remain exempted, services provided through any online marketplace will be tax-deductible at a rate of 5% beginning January 1, 2022.

New Delhi: If you use Ola or Uber frequently, expect to pay more for the services you use. From January 1, 2022, the government has announced that auto-rickshaws offered through online platforms will be subject to a 5% GST. The GST exemption for auto-rickshaws that provide passenger transportation services on internet platforms was cancelled by the Revenue Department, which is part of the Finance Ministry, in a statement.

While passenger transportation services provided by auto-rickshaw drivers in manual or offline mode will remain exempted, services provided through any online marketplace will be tax-deductible at a rate of 5% beginning January 1, 2022.

This modification will have a direct impact on e-commerce industry firms that supply a significant number of auto rickshaw drivers with an online platform for connecting with riders. Because of its less expensive, more convenient, and more flexible method of arranging rides, the e-commerce business has carved itself a very important niche in the market for facilitating passenger transportation services.