GST on subscription ride hailing platforms like Rapido and Bharat Taxi may hit driver earnings
New Delhi: Extending GST liability to subscription based ride hailing platforms such as Rapido and Bharat Taxi could reduce driver earnings, curb participation and weaken passenger demand, an Esya Centre report said.
The report, based on a survey of more than 2,100 drivers and passengers across 13 cities, examines subscription or software as a service (SaaS) models used by platforms such as Rapido, Bharat Taxi and similar apps, where drivers typically pay a fixed subscription fee for access to customers and negotiate fares directly with passengers.
The study contrasts this with commission based aggregators such as Uber and Ola, where platforms generally set fares, collect payments and deduct a commission before transferring the remainder to drivers.
Under India's GST framework, passenger transport services supplied through e commerce operators fall under Section 9(5) of the Central Goods and Services Tax Act, which shifts tax liability to platforms for certain notified services.
The report said applying the provision to subscription based models raises implementation challenges, as such platforms neither determine fares nor collect payments.
