A Bengaluru-based startup has filed an appeal questioning a July 27 ruling by GST authorities in Karnataka which said app-based cab aggregators must pay GST on trip fares collected by private cab drivers/owners tied to their e-commerce platforms. Opta Cabs, a startup that plans to offer app based cab hailing services, has preferred an appeal to the ruling by the GST Authority on Advance Ruling in Karnataka. Its founder Chandrakaladhar Reddy (44) said: “This kind of regulations impose huge legal costs, and create an entry barrier for startups like us. The policy needs to change.”
Sections of GST experts believe the GST policy requiring aggregators to pay GST on fares collected by cab drivers will hurt startups as “it affects their liquidity and increases their operational risks and costs.”