The Delhi High Court has upheld the Centre’s resolution to levy GST on the providers supplied by an auto-rickshaw or different non-air-conditioned carriages by digital commerce operators like Uber.
A bench headed by Justice Manmohan dismissed the petitions of Uber India Systems Private Ltd and others difficult the 2021 central authorities notifications making fare in respect of a reserving by the platform of an digital commerce operator (ECO) for an auto-rickshaw experience or a bus experience exigible to tax.
The courtroom stated ECOs type a category which is “distinct” from an individual service provider and the notifications, which take away an earlier exemption from tax levy, are in compliance with the object of the GST law to levy tax on every transaction of supply of goods and services.
“The Petitioners have not disputed the aforesaid stated objective of the GST law that every transaction must be taxed. Therefore, the impugned Notifications, which seek to withdraw the exemption and tax the consumers who elect to avail a ride in the auto rickshaw or a non-air-conditioned stage carriage through ECOs, is in conformity with the stated objective of the (GST) Act of 2017,” stated a bench, additionally comprising Justice Manmeet Pritam Singh Arora, within the order handed on April 12.
“This Court has already opined and held that the ECOs are a definite class and the Respondents are effectively inside their jurisdiction to exclude the stated class from exemption. There isn’t any vested proper within the ECOs to assert the continuation of exemption. Therefore, within the opinion of this Court, the classification between ECO and the person service supplier has a rational nexus with the item sought to be achieved by the Act of 2017,” it said.
Besides Uber India, the other petitioners were Pragatisheel Auto Rickshaw Driver Union and IBIBO Group Private Limited along with Make My Trip (India) Private Limited.
Uber India had contended the notifications were violative of Article 14 (equality before law) of the Constitution of India as they failed to satisfy the test of reasonable classification.
It was stated that no differentiation in tax treatment can be created between passenger transport services rendered by auto drivers facilitated through e-commerce platforms versus passenger transport services rendered by auto drivers offline.
The court ruled there was no discrimination on the basis of the mode of booking and observed that the service provided by the individual supplier is only one facet of the bundle of services assured by the ECOs to the consumer.
The ECOs are providing bundle of services such as security, digital payments, etc and partake a charge/commission from both the consumers and the individual supplier, it added.
The court also noted that Uber and similarly placed ECOs were already paying GST on services supplied through them for motor vehicles, including motor cycle other than auto rickshaw.
“In view of the aforesaid findings, we are of the view that the Petitioner 1, 2 and 3 are not entitled to the reliefs as sought in the writ petitions. Therefore, the present batch of writ petitions are dismissed,” it stated.
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