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Levy not discriminatory as classification of ecommerce operators was recognised by statute: HC
In a setback to app-based cab aggregators like Uber and Ola, the Delhi High Court on Wednesday upheld the central government’s decision to levy GST on autorickshaw rides that are booked through ride-sharing applications by commuters.
Holding that the decision to levy GST did not violate any fundamental rights, a division bench comprising Justices Manmohan and Manmeet Pritam Singh Arora said: “Classification as a class of service providers separate and distinct is recognised in the provisions of the (GST) Act. The classification has a rational nexus with the object sought to be achieved. ”
While dismissing Uber’s petition challenging the levy of GST, the HC held that the notifications under challenge did not result in discrimination since the classification of ecommerce operators was recognised bythe statute.
Uber India had challenged the November 2021 notifications on the grounds that increasing the prices for autorickshaw rides on the app would lead to a significant hit on the market. Uber had argued that the notification was discriminatory as the Centre did not have any plans to charge GST on autorickshaw rides booked through offline methods, with the prices of local auto rides still remaining low. There cannot be any distinction in tax treatment between passenger transport services provided by auto drivers facilitated through mobile platforms and passenger transport services provided by auto drivers offline, it added.