Rapido liable to pay GST for cab services: Karnataka AAR
The Karnataka Authority for Advance Rulings (AAR) has held that ride-hailing platform Rapido is liable to pay goods and services tax for its cab services, a ruling that potentially adds to the ambiguity over GST applicability on app-based mobility companies operating the subscription model.
Rapido submitted that it charges a subscription fee to its driver partners—as against charging them a commission—and does not make any revenue on the fare.
However, the AAR ruled that Rapido’s services, even though being provided through independent four-wheeler service providers, will attract GST. ET has seen a copy of the order dated July 24.
The ruling opens up Rapido—which just raised $120 million in funding, turning it into a unicorn—to previous tax dues on its cab services, but people aware of the matter said the Bengaluru-based company is evaluating appealing the AAR’s ruling.
