Uber want Centre to reconsider 5% GST on auto rides booked online from January 1

BENGALURU: Your auto rickshaw ride booked through platforms is likely to be costlier from New Year. With the Centre deciding to impose 5% GST on auto rickshaw rides booked online from January 1, app-based aggregator Uber on Wednesday demanded a reconsideration of the move.

In a statement, an Uber spokesperson said: “The Centre has announced it will levy a 5% GST on auto rides booked online from January 1, ending an existing exemption. Auto rides hailed on the street will continue to be GST-free. While we appreciate the need for the government to reconsider this tax, which will end up hurting the earning of auto drivers as well as the government’s digitization agenda.

Further, it said: “We urge the government to reinstate the GST exemption for online auto products in the ride sharing industry to ensure riders, drivers and cities can keep benefiting from the growth in this sector”.

“Lakhs of auto drivers across India rely on Uber and other apps to earn a living. Riders, especially women and the elderly, like booking an auto via an app because of the safety and convenience that comes with it. But they also value affordability. This tax will lead to a rise in platform fares and a corresponding drop in demand. Riders and drivers will both lose out in this scenario”, it said.

Further, it stated: “There are also questions over whether this tax will result in actual revenue gains for the government. As demand shifts to street hail, the revenue from GST applied selectively to online bookings is likely to be marginal, at best”.

“Bringing traditional goods and services online has benefited Indian consumers and workers, something the government recognizes in its support for ‘Digital India’. This tax creates an uneven playing field and goes against this vision of digitization of services, products and payments”, it adds.