Auto-rickshaw services delivered through e-commerce platforms to attract 5% GST

Auto-rickshaw services provided via e-commerce platforms would attract 5 percent GST from January 1, 2022. Through a statement dated November 18, the Revenue Department of the Treasury withdrew the GST exemption for autorickshaws providing passenger transportation services through e-commerce platforms.

While passenger transportation services provided by autorickshaw drivers via offline / manual mode will continue to be exempt, such services, when provided through any e-commerce platform, will be taxable at 5 percent from January 1, 2022.

“This change should have a direct impact in the case of e-commerce industry players providing an online platform for a large number of autorickshaw drivers to get in touch with riders. The e-commerce industry has established a very crucial place in the market when it comes to to facilitate passenger transport services due to its cheaper, convenient and flexible way of booking trips.

“The newly introduced provision would make rides ordered via e-commerce platform more expensive, thereby creating tax differences for the same service when delivered offline compared to online mode,” said EY India Tax Partner Bipin Sapra.

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