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

Case Title: Uber India Systems (P.) Ltd. v. Union of India

Court Name: High Court of Delhi

Petition Number: W.P.(C) No. 14048 of 2021

Category of Dispute: Classification and Levy of GST

Date of Judgement/Order: 10th December 2021

Relevant Sections: Article 14, 19(1)(g), and 21 of Constitution of India; Notification Nos. 16/2021 and 17/2021 – Central Tax (Rate); CGST Act, 2017

Facts of the Case

1. The petitioner, Uber India Systems (P.) Ltd., challenged the validity of certain clauses under Notification No. 16/2021 and Notification No. 17/2021 – Central Tax (Rate), both dated 18 November 2021, which amend earlier GST notifications to bring auto rickshaw services booked through e-commerce platforms under the GST ambit (para1).
2. These notifications made GST applicable (5% or 12%) to passenger transportation services provided via auto rickshaws only if the booking is facilitated through an electronic commerce operator (ECO) like Uber, whereas similar services provided through offline means such as street hailing remained exempt from GST (para 2).

Question(s) in Consideration

1. Whether the levy of GST on auto rickshaw passenger transport services booked via electronic commerce platforms while exempting the same service through offline means violates Article 14 (Right to Equality) of the Constitution? (para 3)
2. Whether such differential tax treatment is arbitrary and unconstitutional under Articles 19(1)(g) and 21 of the Constitution? (para 3)

Observation of the Court

1. The Court took note of the petitioner’s contention that the impugned notifications are discriminatory, failing the test of reasonable classification under Article 14 of the Constitution, as both modes (online and offline) of auto rickshaw service provide the same transport functionality (¶3).
2. The Court acknowledged the issue raised and issued notice to the respondents. On request from the counsel for the respondents, the matter was listed for further hearing on 21st December 2021 (¶4–5).

Judgement of the Court

1. The Court did not deliver a final ruling on the constitutional validity of the impugned notifications. Instead, it directed the issuance of notice and adjourned the matter to 21st December 2021, giving the respondent time to obtain instructions and respond (¶5).

Between Fine Lines

• The case highlights the emerging GST complexities involving digital platforms.
• Uber contends that taxing app-based auto rides while exempting street-hailed ones creates unconstitutional discrimination.
• The High Court has acknowledged the issue and has sought responses from the Government.
• The core challenge revolves around parity in taxation and regulatory neutrality in a digital economy.
• Final adjudication was awaited as of the hearing on 10 December 2021.

Summary of Referred Cases

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