With Goods and Services Tax (GST) rule change, cab aggregators Ola and Uber will get costlier from today. They have been asked to collect 5% GST for booking two and three wheeler vehicles effective January 1, 2022. The Union government has declared that it will levy a 5% GST on auto rides booked online from January 1, 2022 ending an existing exemption.
Auto rides taken from the streets will continue to be GST-free. Uber demanded a reconsideration of the move citing that this will end up affecting the earnings of auto drivers as well as the government's digitisation agenda. The cab aggregators stated that the earnings have already nosedived due to COVID-19 pandemic and now levying 5% GST will further deteriorate the situation.
Food aggregators like Swiggy and Zomato will also have to collect and deposit tax at 5% rate from today. This move will widen the tax base as food outlets which are currently outside the GST threshold will become liable to the tax when provided through these online platforms.
Finance Minister Nirmala Sitharaman, at the 45th meeting of the GST Council held in September earlier this year, announced the change in tax regime for food ordering services. The government says this move will curb tax evasions by restaurants.
Currently, restaurants registered under Goods and Services Tax are collecting and depositing GST. Footwear irrespective of prices will attract 12% tax from today. These are among the many changes in the GST regime that have come into effect in this new year 2022.
