There’s bad news if you commute via Ola and Uber auto on a regular basis. The government of India has decided to impose 5 percent GST on auto rickshaw rides booked via Ola and Uber mobile app. Also Read - Delhi govt makes electric vehicles mandatory for Zomato, Ola, Uber, Swiggy
This will make your auto rides much costlier from the new year, January 1, 2022. Also Read - Ola S1, S1 Pro buyers won't get promised features until the next 6 months: Report
Your auto rides are getting costlier
As per a report coming from the Times of India, an Uber spokesperson said that they appreciate the move and the idea that the government wants to collect revenue. The spokesperson further added that the move will impact the earnings of auto drivers and the government’s digitisation agenda. Also Read - Want to buy Ola Electric Scooter? Your wait will end soon
Announcing the move, the Union government said that it will levy a 5 percent GST on auto rides booked via the online platform from January 1, 2021, onward. The government further added that auto rides taken from the streets will continue to be GST-free.
“We urge the government to reinstate the GST exemption for online auto products in the ride-sharing industry to ensure riders, drivers and cities can keep benefiting from the growth in this sector,” the official statement added.
Reactions of the move
With just a few days left for the GST to get implemented, several ride-sharing applications/platforms have urged the government to reconsider the decision. Aravind Sanka, co-founder of Rapido said that the new policy may impact the entire ride-hailing business.
Sanka believes that both riders and drivers will get impacted by the increased GST. “This policy might lower the rate of consumers opting for auto rides, further making commuting less feasible and hassle-free,” he said.
Raghu N, a representative of Peace Auto, an association of auto-rickshaw drivers also requests the Union government to reconsider the move and withdraw the tax. He further highlighted that the COVID-19 pandemic has already impacted the ridesharing business and with the new policy coming into effect soon, the auto drivers are going to be majorly impacted.