Ola, Uber, Rapido To Seek GST Clarity On Their SaaS Model: Report

Ride-hailing platforms like Ola, Uber and Rapido will reportedly approach the Central Board of Indirect Taxes and Customs (CBIC) regarding goods and services tax (GST) on their SaaS model following conflicting rulings from the Karnataka Authority for Advance Ruling (AAR).

An ET report, citing people familiar with the matter, said that the ride-hailing firms have alleged that the Karnataka AAR’s decision is distorting competitive parity in the sector.

Inc42 has reached out to Rapido, Uber, Ola for comments on the development. The story will be updated based on their responses.

To minimise GST liability, ride-hailing platforms have shifted to the subscription-based model, where drivers pay a fixed platform fee instead of ride commissions.

Earlier this month, Ola launched a SaaS-based zero commission model for its cab drivers, allowing them to retain 100% of their earnings by subscribing to a daily or monthly pass. This model, which has already been implemented for autos and bikes, is now available nationwide for cabs. Its rivals Rapido and Namma Yatri had already introduced similar SaaS models for their auto drivers last year.

While SaaS platforms like Namma Yatri have been exempted from GST by the Karnataka AAR, others like Rapido remain liable, having been classified as e-commerce operators.

Last year, Uber challenged this inconsistency before the Karnataka Authority for Advance Rulings and the GST Council, arguing that it creates unfair competition and ambiguity in the interpretation of tax laws.

(The story will be updated soon.)

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