The Delhi High Court on Wednesday upheld government notifications imposing Goods and Services Tax (GST) on auto rickshaws booked through app-based aggregators such as Uber and Ola.
A division bench of Justices Manmohan and Manmeet Pritam Singh Arora ruled that the challenged notifications do not result in discrimination because the classification of e-commerce firms was recognized by the statute.
“The provisions of the Act recognize classification as a separate and distinct class of service providers. The classification has a rational nexus with the object sought to be achieved,” the court reasoned.
As a result, the court determined that the orders did not infringe any basic rights.
The court was hearing a petition filed by Uber India challenging the Central Government’s notifications issued in November 2021.
Following these notifications, it was contended that if an auto-driver registers with an app-based aggregator and provides transportation of passenger services to passengers identified through such platforms, GST at 5% or 12% will become chargeable on the fare collected.
Uber argued that the government had no plans to levy such a tax on auto rides using offline means such as street hailing, and hence the notifications violated Article 14 of the Constitution.
It was stated that the government’s orders fail to meet the reasonable classification test and that no distinction in tax treatment can be made between passenger transport services rendered by auto drivers facilitated through mobile platforms versus passenger transport services rendered by auto drivers offline.
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