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News on Medial
Ride-hailing firms to seek GST clarity from tax regulator
Economic Times
·
23d ago
Medial
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.
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GST haze holding up funding, innovation at ride-hailing companies
Economic Times
·
10m ago
Medial
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.
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Ola, Uber roll out subscription-based plans for auto drivers
Economic Times
·
1y ago
Medial
Indian ride-hailing platforms Ola and Uber are introducing subscription-based plans for auto-rickshaw drivers on their platforms. Instead of charging a booking fee or commission on each transaction, Ola and Uber will charge a fixed daily or weekly fee to driver partners for unlimited rides. The move could potentially help the platforms bypass the 5% goods and services tax (GST) applicable on auto-rickshaw rides facilitated by them. However, tax experts have expressed concerns over potential disputes with tax authorities and lack of clarity on whether the applicable tax ruling would apply to other platforms as well.
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Ola And Uber Unveil Subscription-Based Models For Auto Drivers
Inc42
·
1y ago
Medial
Ride-hailing giants Ola and Uber are introducing subscription-based plans for auto-rickshaw drivers on their platforms instead of charging a commission or booking fee for every transaction. Ola has introduced the subscription model in Delhi-NCR, Mumbai, Bengaluru, and Hyderabad, while Uber has initiated a similar program in Chennai, Kochi, and Visakhapatnam. This new model, where platforms charge a fixed daily or weekly fee to drivers for unlimited rides, could potentially help the companies avoid the 5% GST imposed on auto-rickshaw rides. However, there are concerns about potential disputes with tax authorities due to a lack of clarity regarding tax exemptions.
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Rapido liable to pay GST for cab services: Karnataka AAR
Economic Times
·
11m ago
Medial
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.
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Supreme Court to hear gaming firms’ challenge to 28% GST rule
Economic Times
·
6m ago
Medial
The Supreme Court is set to hear petitions from online gaming firms and casinos challenging the 28% GST imposition on the full value of bets rather than gross gaming revenue. These firms face significant retrospective tax demands since 2023, fearing coercive actions by tax authorities. The Court had earlier stayed a Karnataka High Court judgment demanding Rs 21,000 crore GST from GamesKraft. The petitions argue against the government's view equating all online betting to gambling for tax purposes.
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Ola, Uber, Rapido Seek GST Clarity on New SaaS-Based Model
OutlookIndia
·
23d ago
Medial
Ola, Uber, and Rapido are seeking clarity from the Central Board of Indirect Taxes and Customs (CBIC) on the applicability of GST for their subscription-based service model. This model charges drivers a fixed fee instead of commissions. The inquiry follows a ruling permitting a rival to operate GST-free, while imposing tax on Uber and Rapido. The companies argue this creates competitive disparity due to inconsistent tax treatment across the industry.
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Uber effect: CBIC to meet with ecommerce operators on Monday to resolve GST on rides
Economic Times
·
9m ago
Medial
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.
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Zero commission model in mobility can increase driver incomes by 30%: ONDC
YourStory
·
7m ago
Medial
The Government-backed Open Network for Digital Commerce (ONDC) has released a whitepaper discussing the benefits of its zero commission model for the mobility sector. The report highlights the challenges faced by ride-hailing drivers who pay a percentage of their earnings as commissions to platforms. In contrast, the ONDC's zero commission model, which charges a flat platform fee or a monthly subscription fee starting from as low as Rs 10 per day, allows drivers to retain 100% of their earnings. This could lead to a 30% increase in driver incomes, amounting to Rs 1.36 lakh annually, benefiting approximately 15 lakh drivers across India. The ONDC aims to promote digital inclusion and growth through its open network approach, which prioritizes interoperability and unbundling of services. This model has the potential to generate significant economic impact and tax revenue for the government. The whitepaper also argues for a differentiated approach to applying GST to support the growth of open network zero-commission ride-hailing services.
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IPL Blues For Fantasy Gaming
Inc42
·
1y ago
Medial
Fantasy gaming apps in India are facing challenges in acquiring customers and marketing during IPL 2024 due to the impact of the Goods and Services Tax (GST). The clarity received last year regarding the 28% GST tax on real money gaming has led to cutbacks in marketing spends and layoffs for many startups in the fantasy gaming industry. The tax has resulted in a decline in user engagement and a drop in customer acquisition. As a result, fantasy gaming platforms are rethinking their strategies to avoid major losses during the IPL season.
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Foreign investors demand tax indemnities for startup investments
Money Control
·
10m ago
Medial
Foreign private equity and venture capital funds are increasingly demanding tax-related indemnification from Indian startups in order to protect themselves against potential tax demands. Indemnity clauses are becoming more comprehensive, with rising indemnity cap sizes, and tax insurance is gaining traction in the Indian market. These measures aim to ensure accurate tax representations, better compliance, and safeguard investments against unforeseen tax liabilities. Recent tax notices and demands faced by startups in relation to goods and services tax (GST), angel tax, and other direct taxes have prompted investors to seek such protection.
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