AAR: No GST Levy on E-commerce Firms for 3rd Parties Cab Services

The Karnataka authority for advance rulings (AAR) ruled that e-commerce owners who do not have control over drivers and passengers shall not be levied goods and services tax (GST) on cab services that have been furnished via third parties.

Since the companies secure different business models thus experts stated, the ruling would not be applicable to the cab aggregators Uber and Ola.

Multi-Verse Technologies Pvt Ltd has the business of furnishing services through the method of computer software application services so as to connect the sellers to the buyers mentioned to AAR, no company engagement is there in managing the supply of services via the member or managing the payment through the buyers.

On the application, the service suppliers could enrol themselves as business users while the buyers can register themselves as individual users.

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AAR found the app permits the passengers to find out nearby vehicles. The company does not secure any control over the ride and does not collect the fare from customers. For any sort of deficiency, the company would not be liable to the customers.

The company would be an electronic commerce operator however the same would not be responsible to release the tax liability, AAR ruled.

Aggregators like OLA, Uber, and Rapido do not get an advantage via the same ruling since their model draws attention to the fee and essential control of the terms and quality of the service. Since they carried on to file GST returns on a reverse charge basis.