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GST haze holding up funding, innovation at ride-hailing companies

Economic Times

Economic Times · 11m ago

GST haze holding up funding, innovation at ride-hailing companies

App-based ride hailing services such as Uber and Rapido have halted innovation and investment due to a lack of clarity on goods and services tax (GST) rates applicable to different business models for taxi and auto-rickshaw rides. Conflicting rulings by the Authority on Advance Ruling (AAR) have created uncertainty in the industry, prompting Uber to seek clarification. The confusion exists in all states, with recent rulings in Karnataka and Tamil Nadu holding divergent views on GST applicability. This inconsistency in tax administration hampers competition and creates pricing arbitrage advantages.

Related News

Ride-hailing firms to seek GST clarity from tax regulator

Economic Times

Economic Times · 2m ago

Ride-hailing firms to seek GST clarity from tax regulator

Ride-hailing companies like Ola, Uber, and Rapido plan to address the Central Board of Indirect Taxes and Customs regarding the GST application on their SaaS subscription models. They argue this model creates tax inconsistencies and affects competitive parity, as the Karnataka Authority for Advance Ruling exempted Namma Yatri from GST, unlike others. The industry seeks clarity from authorities amid challenges, like diverging rulings and the potential for tax disputes, with the issue impacting pricing and competitiveness.

Rapido liable to pay GST for cab services: Karnataka AAR

Economic Times

Economic Times · 1y ago

Rapido liable to pay GST for cab services: Karnataka AAR

The Karnataka Authority for Advance Rulings (AAR) has ruled that ride-hailing platform Rapido is liable to pay goods and services tax (GST) for its cab services. This ruling creates ambiguity over GST applicability for app-based mobility companies operating on the subscription model. Rapido charges a subscription fee to its driver partners and does not make revenue on the fare. However, the AAR has determined that Rapido's services, provided through independent four-wheeler service providers, will attract GST. Rapido is considering appealing the ruling. This ruling potentially raises tax dues on Rapido's cab services.

Single-window licensing portal for cab aggregators likely by year-end

Livemint

Livemint · 1m ago

Single-window licensing portal for cab aggregators likely by year-end

The Indian government plans to launch a centralised portal by the end of the year for cab aggregators like Ola, Uber, and Rapido. This single-window clearance system aims to streamline and speed up the licensing process across different states, integrating various state approval mechanisms. The unified process will allow these companies to enter new markets more rapidly, which would promote growth and innovation in the ride-hailing sector.

Alphabet's Waymo closes $5.6 billion funding to expand autonomous ride-hailing service

Economic Times

Economic Times · 10m ago

Alphabet's Waymo closes $5.6 billion funding to expand autonomous ride-hailing service

Alphabet's self-driving unit, Waymo, has secured $5.6 billion in funding led by parent company Google. The investment will help Waymo expand its autonomous ride-hailing service, Waymo One, in cities including San Francisco, Phoenix, Los Angeles, Austin, and Atlanta. The funding round saw participation from existing investors such as Andreessen Horowitz, Fidelity, Silver Lake, and Tiger Global. Waymo has spent years testing autonomous vehicles and is now offering paid rides to the public in select locations. This investment comes as automakers and technology companies continue to invest in autonomous ride-hailing services despite regulatory challenges.

GST on ride-hailing: Karnataka AAR says may recall ruling on Namma Yatri - The Economic Times

Economic Times

Economic Times · 2m ago

GST on ride-hailing: Karnataka AAR says may recall ruling on Namma Yatri - The Economic Times

Karnataka's Authority for Advance Ruling (AAR) might reverse a decision that Juspay Technologies' Namma Yatri service wasn't liable for GST on auto-rickshaw rides. Juspay had transferred the business to Moving Tech Innovations. The AAR indicates potential ruling voidance due to misrepresentation, as Namma Yatri was acquired as a "going concern." Experts see this move as an unusual attempt to repeal a business-friendly provision. Meanwhile, GST applicability for ride-hailing services remains debated.

Rapido in talks to challenge Swiggy and Zomato in food delivery space

Economic Times

Economic Times · 5m ago

Rapido in talks to challenge Swiggy and Zomato in food delivery space

Ride-hailing app Rapido is exploring entry into the food delivery sector, aiming to challenge market leaders Zomato and Swiggy. Rapido is in talks with restaurateurs to devise a competitive business model and already offers delivery services to individual restaurants. Swiggy, an investor in Rapido, doesn’t have an exclusivity clause preventing this expansion. Rapido is also scaling up its ride-hailing service, targeting growth with a focus on increasing service cities and daily ride numbers.

Uber effect: CBIC to meet with ecommerce operators on Monday to resolve GST on rides

Economic Times

Economic Times · 10m ago

Uber effect: CBIC to meet with ecommerce operators on Monday to resolve GST on rides

The Central Bureau of Indirect Taxes and Customs (CBIC) has called for a meeting with app-based ride hailing services in Delhi to address concerns over the applicability of GST on rides booked through ecommerce platforms. This comes after Uber India raised concerns about a lack of uniformity and a level playing field. The meeting aims to gather input from stakeholders and consider amendments or clarifications if needed in the GST law. The meeting follows a directive from the Karnataka High Court for the CBIC to decide on Uber India's representations regarding GST liability.

Why the ride-hailing industry moved away from commission-based models

Economic Times

Economic Times · 2m ago

Why the ride-hailing industry moved away from commission-based models

The ride-hailing industry is shifting away from commission-based models due to driver dissatisfaction and low earnings. Ola recently introduced a zero percent commission model, allowing drivers to keep all their fares. Other companies, like Rapido and Uber, have also adopted alternative strategies, influenced by similar concerns. The rise of platforms like Namma Yatri, which address high commission issues, has spurred this trend. Consequently, ride-hailing companies are exploring new revenue streams to remain competitive.

EV ride-hailing company BluSmart raises $24 million in funding

Economic Times

Economic Times · 1y ago

EV ride-hailing company BluSmart raises $24 million in funding

Electric vehicle ride-hailing startup BluSmart has secured $24 million in a funding round led by existing investors ResponsAbility Investments, cricketer MS Dhoni's Family Office, and ReNew founder Sumant Sinha. The funding will be used to expand operations and build EV charging infrastructure. BluSmart currently operates 7,500 EVs and aims to turn profitable on an EBITDA basis by March 2026. The company faces competition from Uber, Ola, Rapido, and Namma Yatri in the ride-hailing space. BluSmart previously struggled to raise external capital and received smaller funding instances totaling $66 million in previous years.

Uber, Rapido welcome new Motor Vehicle Aggregator Guidelines 2025

YourStory

YourStory · 1m ago

Uber, Rapido welcome new Motor Vehicle Aggregator Guidelines 2025

India's ride-hailing sector, including Uber and Rapido, has welcomed the Motor Vehicle Aggregator Guidelines 2025. This new regulation permits states to officially allow non-transport motorcycles for passenger rides, providing clarity and fostering innovation. The guidelines aim to enhance affordable mobility, tackle traffic and pollution issues, and create numerous livelihood opportunities by integrating shared mobility. Companies praise the consultative approach and emphasize the importance of uniform implementation for effective rollout.

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