GST on app-based rides cutting driver earnings: IAMAI

The Internet and Mobile Association of India (IAMAI) has said that the current GST structure on app-based cab services is reducing the net earnings of driver partners and affecting ride affordability, urging the Finance Ministry to re-examine the tax framework.

In a recent letter to the Finance Ministry, IAMAI said that applying 5 per cent GST on every ride booked through digital platforms has a direct and disproportionate impact on drivers’ take-home income. The industry body, which represents platforms such as Uber, Ola and Rapido, noted that the issue also affects government-supported digital mobility platforms, including Bharat Taxi.

IAMAI pointed out that under the existing GST regime, Electronic Commerce Operators are required to pay tax on passenger transport services booked through their platforms. The association also highlighted inconsistencies in GST enforcement, noting that some states, such as Karnataka, have imposed GST liability on private ride-hailing apps while exempting open-source platforms like Namma Yatri.