Applicability of GST on Auto Rickshaw Service booked through E-Commerce Platform whereas, manually exempts from GST.

Case Details:

Issue- In the above case, the petitioner has challenged the clause (iv) of the Notification No. 16/2021- Central Tax (Rate) dated 18th November, 2021 and clause 1(i) and clause 2(i) of Notification No. 17/2021 – Central Tax (Rate) dated 18th November, 2021 as ultra vires the Constitution of India being unreasonable, arbitrary and violative of Articles 14, 19(1)(g) and 21 of the Constitution of India.  Petitioner states that Notification No. 16/2021 and Notification No. 17/2021 have made amendments to the parent notifications i.e. Notification No. 12/2017 and Notification No. 17/2017 in order to levy GST on the supply of transportation of passenger service, through an ‘electronic commerce operator’, and provided by an auto rickshaw. He further states that the Impugned Notifications will come into effect from 1st January, 2022 and if an auto-driver registers itself with an e-commerce operator like the Petitioner and provides transportation of passenger services to passengers identified through such e-commerce platform, GST at 5% or 12% will become applicable on the fare collected on such passenger transport services through auto rickshaws, even though an auto ride through offline modes like street hailing of auto will still be exempt. Therefore, impugned notifications are violative of Article 14 of the Constitution of India as they fail to satisfy the test of reasonable classification.

Held- It was held that since, no differentiation in tax treatment can be created between passenger transport services rendered by auto drivers facilitated through e-commerce platforms versus passenger transport services rendered by auto drivers offline. Therefore, Notice was to be issued.