India’s ride-hailing industry could soon see greater clarity on GST rules as the GST Council is expected to review taxation issues surrounding app-based mobility platforms such as Uber, Ola, and Rapido.
According to reports, the Council is likely to discuss the matter in its upcoming meeting before the monsoon session of Parliament, with a focus on resolving confusion around how GST should apply to newer subscription-based ride-hailing models.
Currently, app-based cab aggregators attract 5% GST on ride fares under Section 9(5) of the Central GST Act, where the responsibility for tax payment lies with the e-commerce operator.
The issue has emerged because different ride-hailing companies operate under different business models.
Traditional platforms like Uber and Ola follow a commission-based structure. They collect payments from passengers, deduct their commission, and transfer the remaining amount to drivers. Since the platform controls the transaction, GST is levied on the fare amount.
However, newer players like Rapido and Namma Yatri operate differently. Under their subscription-based model, drivers pay a fixed daily or weekly fee to access the platform, while fares are settled directly between the passenger and driver.
These companies argue that since they do not collect or aggregate fares, GST should apply only to the subscription fee charged to drivers and not to the ride fare itself.
The confusion has intensified after differing rulings by state tax authorities. Karnataka’s Advance Ruling Authority reportedly ruled that Namma Yatri falls outside Section 9(5), while a separate ruling held Rapido liable under the same provision despite similarities in operating models.
The issue has now become significant for India’s growing digital mobility sector, especially as more technology platforms experiment with alternative revenue structures beyond traditional commissions.
Apart from ride-hailing taxation, the GST Council is also expected to review measures aimed at simplifying GST compliance. This may include easing registration procedures and improving clarity around input tax credit (ITC) claims.
Read more: ixigo Bets Big on AI Travel With TARA, Smart Trip Tools and Automated Booking Support.
The upcoming GST Council meeting could become important for India’s digital platform economy, particularly for mobility startups experimenting with newer business models. A clear framework on GST applicability would not only reduce legal uncertainty for ride-hailing companies but also help align tax rules with the evolving structure of India’s app-based economy.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
Published on: May 14, 2026, 12:14 PM IST
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
