The fresh representations follow a recent order of the Karnataka High Court that asked Central Board of Indirect Taxes and Customs (CBIC) to clarify its stance on the issue
In an effort to flag ambiguities arising from inconsistent tax treatment of the software as a service (SaaS) after conflicting rulings from the Karnataka Authority for Advance Ruling (AAR), ride-hailing platforms like Ola, Uber and Rapido will approach the Central Board of Indirect Taxes and Customs (CBIC), as per media reports.
The platforms charge a fixed subscription fee to gig workers instead of a commission under the SaaS model, the reports noted, while adding that the platforms allege that the decision of the Karnataka AAR is distorting competitive parity in the industry.
The reports emphasised that while the Karnataka AAR held that Rapido and Uber are liable to pay the tax under the model, the authority allowed Namma Yatri to continue the operations without levying goods and service tax (GST). Rapido adopts the subscription model for its four-wheeler and auto-rickshaw ride-hailing offering, while Uber operates the same model for three-wheeler ride-hailing.
The fresh representations follow a recent order of the Karnataka High Court that asked CBIC to engage stakeholders and clarify its stance on the issue. The reports noted that the subscription model helps the platforms to bypass the 5 per cent GST, which is applicable under the Central GST Act. The act mandates ecommerce companies like ride-hailing platforms, food-delivery companies to collect and pay tax on behalf of service providers on their apps, the reports pointed out.
