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For a notified passenger-transport service supplied through an e-commerce operator, the platform is liable to pay GST under section 9(5) of India’s CGST Act. The driver may provide the ride and the passenger may pay the fare, but neither fact alone determines who must remit the tax. The key question is whether the ride service is supplied through the platform.
Who is legally responsible for GST on an app-cab ride?
Section 9(5) makes an e-commerce operator liable to pay GST on certain notified services supplied through it. For those services, the operator is treated as the supplier liable for the tax. The Central Board of Indirect Taxes and Customs (CBIC) explains this rule in its Sectoral FAQ and identifies Notification No. 17/2017-Central Tax (Rate) and Notification No. 14/2017-Integrated Tax (Rate) as relevant notifications.
The notified passenger-transport category includes transport by motorcab, maxicab, motorcycle, or another motor vehicle other than an omnibus, when supplied through an e-commerce operator. So the answer is not automatically “the driver” because the driver performs the trip, or “the passenger” because the passenger pays the fare. Liability depends on the service category and the platform’s role in supplying that ride.
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No. Merely being an e-commerce operator does not settle whether a particular ride is supplied through that operator for section 9(5). The operator’s role in the actual ride supply and the arrangement’s facts matter.
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A West Bengal Authority for Advance Ruling decision concerning Yatri Sathi found that, although the applicant was an e-commerce operator, the driver’s service in that particular model was not supplied through it for section 9(5) purposes. That ruling illustrates the importance of the facts; it is not a universal determination for every platform. The ruling notes that an advance ruling applies in relation to its applicant and the facts considered. See the Yatri Sathi advance ruling.
Does paying the driver directly change who pays GST?
Not by itself. In an advance ruling concerning Uber India, the authority concluded that a passenger’s direct payment to the driver did not, on its own, prevent section 9(5) liability from attaching to the operator where the notified service was supplied through the platform. That conclusion concerned the applicant’s facts and should not be treated as a blanket ruling for every app or fare arrangement. See the Uber India advance ruling.
Who pays the tax versus who bears its cost
Section 9(5) addresses who is liable to remit GST to the government. It does not establish who ultimately bears the cost under every fare structure. That can depend on the fare, the invoice, the app’s pricing, and the contractual arrangement. A GST line on a passenger’s fare is not, by itself, proof that the passenger is the statutory remitter; payment to the driver is not, by itself, proof that the driver is.
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CBIC’s rate table lists a 5% rate for radio-taxi passenger transport and for specified passenger-motor-vehicle transport where fuel cost is included in the consideration. For an intra-state radio-taxi supply, the table expresses 5% as 2.5% central tax plus 2.5% state tax. The listed rates are subject to the applicable conditions, including input-tax-credit restrictions for relevant categories. See CBIC’s GST rates table.
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The table separately lists metered cabs and auto-rickshaws among exempt transport services, but states that the exemption does not apply to services supplied through an e-commerce operator and notified under section 5(5) of the IGST Act. Do not assume that one rate applies to every app ride, vehicle category, fare component, or inter-state supply. The vehicle and service classification, applicable notification, and invoice details matter.
What should you check on a specific ride?
- Open the ride’s tax invoice or fare breakdown. Identify the service or vehicle category, the stated GST rate, and whether the platform is shown as the supplier or as liable under section 9(5).
- Compare the charge with the ride arrangement. Check whether the ride was supplied through the platform and whether the invoice distinguishes the ride fare from any separate platform fee.
- Ask the platform for the basis of the charge if it is unclear. Request the applicable GST invoice and an explanation of the category and rate used.
The cited CBIC materials and advance rulings explain the framework but do not determine the contract or invoice treatment for every current app or individual ride. Rates, notifications, invoice formats, and platform arrangements can change, so check current CBIC materials for a specific dispute or transaction.
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Can the driver claim threshold exemption?
CBIC says suppliers of services for which an operator pays tax under section 9(5) are entitled to threshold exemption. That treatment is tied to the notified services and relevant operator arrangement; it is not a general exemption for every driver who accepts bookings through any app.
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