The Government has recently streamlined GST rates and compliance rules for operators and aggregators, bringing more clarity and uniformity in the sector. These changes impact cab operators, ride aggregators, and businesses availing transport services. Let’s break down the key points:
GST for Offline Operators
Registered cab operators now have two GST options when providing services directly to customers:
- 5% GST (without full ITC):
- A concessional rate.
- Input Tax Credit (ITC) restricted only to inputs from the same line of business.
- Commonly used for individual services.
- 18% GST (with full ITC):
- Higher rate but allows full ITC on expenses such as vehicle maintenance and repairs.
- This replaced the earlier 12% rate with ITC.
GST for Ride Aggregators (Ola, Uber, etc.)
- Aggregators must collect and pay 5% GST on the total fare for all rides booked through their platform (whether AC or non-AC).
- However, offline bookings for auto-rickshaws and metered taxis remain exempt from GST.
Key Changes and Considerations
1. Rent-a-Cab Services
- The GST rate for renting vehicles with a driver (with ITC) has been increased from 12% to 18%.
- Operators opting for ITC need to factor in this higher rate.
2. Subscription Model Liability
- Conflicting AAR rulings have created uncertainty for aggregators using subscription-based models.
- Some rulings hold the aggregator liable under Section 9(5), while others differ.
3. Input Tax Credit (ITC) for Businesses
- Generally, companies cannot claim ITC on GST paid for rent-a-cab services.
- Exceptions:
- Statutory obligation: ITC can be claimed if cab services for employees are required under law (e.g., Factories Act, 1948).
- Same line of business: A cab operator can claim ITC on services from another cab operator.
4. Reverse Charge Mechanism (RCM)
RCM continues for passenger transport when:
- Services are provided by a non-corporate supplier to a body corporate.
- The supplier opts for 5% GST without ITC instead of 18% with ITC.
Final Note for Jajpur Business
These GST reforms simplify the compliance landscape but also bring important choices for operators, aggregators, and businesses. Proper planning is necessary to optimize tax liability while ensuring compliance.
👉 Note: For any future clarifications or specific case advice, please consult your CA (Chartered Accountant) or local GST office.