Company liable for GST on transportation services provided by taxi operators via its platform under CGST & KGST Acts.

The ruling determined that the applicant company is liable to pay GST on amounts billed for transportation services provided by taxi operators through the applicant's platform, in accordance with relevant provisions of the CGST and KGST Acts and associated notifications. The Authority found the applicant, as a facilitator of transportation services through taxi operators, falls under the category of electronic commerce operators responsible for paying tax on such services, as outlined in Section 9(5) of the CGST Act and Notification No. 17/2017.

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Issues:
1. Whether the money paid by the customer to the driver of the cab for the services of the trip is liable to GST and whether the applicant company is liable to pay GST on this amount.

Analysis:
The applicant, a Private Limited Company registered under the Goods and Services Act, sought an advance ruling on the liability of GST on the money paid by customers to cab drivers for trip services. The applicant operates a Taxi Aggregation Service where billing is done in the driver's name, and customers pay the driver directly. The applicant only collects service charges for IT services provided, not trip commissions. The turnover of drivers is stated to be below the threshold for GST, and the applicant believes GST should not be levied on trip amounts. The applicant is registered under GST and charges GST on monthly service charges to cab operators.

The Authority verified the applicant's business model, where the applicant provides a mobile application to customers and taxi operators, collecting monthly charges from operators for using the application. The applicant undertakes to pay GST on these charges. The applicant does not charge consumers any additional fees, only sending invoices for service usage. The customer books the taxi through the application, and the operator receives payment directly from the customer. The applicant's role is limited to issuing invoices on behalf of operators.

Referring to Section 9(5) of the CGST Act, the Authority noted that electronic commerce operators are liable to pay tax on services like transportation of passengers provided through them. Notification No. 17/2017 specifies services like radio-taxi transportation under this provision. As the applicant facilitates transportation services through taxi operators, it is deemed the supplier liable to pay tax on such services. Therefore, the ruling states that the applicant is liable to tax on amounts billed for transportation services in accordance with relevant GST provisions and notifications.

In conclusion, the ruling clarifies that the applicant is liable to pay GST on amounts billed for transportation services provided by taxi operators through the applicant's platform, as per the specified provisions of the CGST and KGST Acts along with relevant notifications.

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