IAMAI wants 5% GST dropped for app-based rides

New Delhi: The app-based mobility industry has pitched for exemption from the 5% goods and services tax (GST), arguing that the levy is being imposed on platforms that often do not collect fares from passengers.

In a representation to the government and the Goods and Services Tax Council, the Internet and Mobile Association of India (IAMAI) said the current tax structure does not reflect how several ride-hailing platforms actually operate.

On these platforms, a driver collects the fare directly from the passenger and the app acts primarily as a technology platform connecting the two, it said. Yet, the industry body said the platform is required to account for the 5% GST on the value of the ride.


The IAMAI said this creates an unfair tax burden that ultimately gets passed on to drivers or passengers.

The association made a case for excluding such technology-based platforms from the provision under Section 9(5) of the CGST Act that shifts the GST responsibility for passenger transport services to the digital platform.

The industry body also flagged conflicting rulings by state tax authorities on whether such platforms fall under the provision, saying the lack of clarity has left the sector facing prolonged uncertainty.