AAR ruling may benefit E-com providers who facilitate transport, housekeeping, hotel accommodation

MUMBAI: The GST-Authority for Advance Rulings (AAR), Karnataka bench, has recently held that Juspay Technologies, which provided a ride-hailing app ‘Namma Yatri’ to merely connect auto-drivers and passengers was an E-commerce operator under GST laws. However, the AAR bench further held that this Bengaluru-based company would not have to collect and pay GST on the transportation fare as the supply of passenger transportation is ‘not made through it’.

Section 9(5) requires E-commerce operators providing a wide range of ‘notified’ services to collect and pay GST. In its order, the AAR bench concluded that the supply by the auto drivers (who are the service providers) to their customers (passengers) does not amount to supply by JustPay Technologies.

Rulings of the AAR do not set a judicial precedent but have a persuasive effect in assessment of similar cases.