Why tax app aggregators when auto rides hailed on streets are not taxed, asks petition; Delhi HC says this in reply

The Delhi High Court on Wednesday upheld the notification of the government that levied Goods and Services Tax (GST) on auto-rickshaws booked through app-based aggregators like Uber, Indrive, Rapido, and Ola.

"Classification as a class of service providers separate and distinct is recognized in the provisions of the Act. The classification has a rational nexus with the object sought to be achieved", the court mentioned.

Therefore, the court has said that as per the regulations, the orders did not violate fundamental rights. Delhi High Court also said the discrimination in the notification of the Center is not complete

Uber India recently approached the Delhi High Court to file the petition. The court was dealing with a plea filed by Uber India challenging the notifications issued by the Central government in November 2021.

Uber India argued that if an auto-driver registers itself with an app-based aggregator and provides transportation of passenger services to passengers identified through such platforms, GST at 5 per cent or 12 per cent will become applicable on the fare collected.

Uber stated that the government was not planning to impose any such tax on auto rides through offline modes like street hailing and, therefore, the notifications were in violation of Article 14 of the Constitution. Uber argued that it is not justified to have any distinction in tax treatment between passenger transport services provided by auto drivers facilitated through mobile platforms and passenger transport services provided by auto drivers offline.

It was stated that the government's directives fail to satisfy the test of reasonable classification and that no differentiation in tax treatment can be created between passenger transport services rendered by auto drivers facilitated through mobile platforms versus passenger transport services rendered by auto drivers offline.

A division bench of Justices Manmohan and Manmeet Pritam Singh Arora also clarified that the said notifications is not in discriminatory  because the classification of e-commerce operators is recognised by the statute.

Why tax app aggregators when auto rides hailed on streets are not taxed, asks petition; Delhi HC says this in reply  

The Delhi High Court on Wednesday upheld the notification of the government that levied Goods and Services Tax (GST) on auto-rickshaws booked through app-based aggregators like Uber, Indrive, Rapido, and Ola.

"Classification as a class of service providers separate and distinct is recognized in the provisions of the Act. The classification has a rational nexus with the object sought to be achieved", the court mentioned.

Therefore, the court has said that as per the regulations, the orders did not violate fundamental rights. Delhi High Court also said the discrimination in the notification of the Center is not complete

Uber India recently approached the Delhi High Court to file the petition. The court was dealing with a plea filed by Uber India challenging the notifications issued by the Central government in November 2021.

Uber India argued that if an auto-driver registers itself with an app-based aggregator and provides transportation of passenger services to passengers identified through such platforms, GST at 5 per cent or 12 per cent will become applicable on the fare collected.

Uber stated that the government was not planning to impose any such tax on auto rides through offline modes like street hailing and, therefore, the notifications were in violation of Article 14 of the Constitution. Uber argued that it is not justified to have any distinction in tax treatment between passenger transport services provided by auto drivers facilitated through mobile platforms and passenger transport services provided by auto drivers offline.

It was stated that the government's directives fail to satisfy the test of reasonable classification and that no differentiation in tax treatment can be created between passenger transport services rendered by auto drivers facilitated through mobile platforms versus passenger transport services rendered by auto drivers offline.

A division bench of Justices Manmohan and Manmeet Pritam Singh Arora also clarified that the said notifications is not in discriminatory  because the classification of e-commerce operators is recognised by the statute.

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.