Govt eyes amendment to CGST Act to bring tax consistency for ride-hailing firms, say sources
The Central government is considering to amend certain GST rules to bring consistency in the tax treatment of the two distinct business models of ride hailing companies, sources told Moneycontrol.
Ola, Uber and Rapido are among the ride-hailing companies which are expected to meet with senior Central Board of Indirect Taxes (CBIC) officials this week to gain clarity on the tax implications of their two distinct business models, the commission-based model and the Software as a Service (SaaS) model.
According to sources, the central government may consider to amend Section 9(5) of the Central Goods and Services Tax (CGST) Act, although it can't be said for sure if the issue would be taken up in the upcoming GST Council meeting, which is likely to be held in July.
"The CBIC is privy of the matter, and an amendment is being considered in the CGST Act, but the nod from Council is required. There is no clarity for now whether the Council will discuss the issue in July," an official told Moneycontrol.
The GST treatment for cab aggregators in India has come under scrutiny due to inconsistencies in how these two business models are taxed. The issue arises from ambiguities in the interpretation of Section 9(5) of the CGST Act, which governs how GST applies to services offered through e-commerce platforms, including passenger transport services.
