App-based auto rides to costlier from 1st January

App-based auto rides to costlier from 1st January

Ride for auto rickshaw using Ola or Uber will become costlier from 1st January. The government plans to charge an additional 5 percent GST on bookings made using online Apps for auto rickshaws. Cab operators are urging the government to restore the decision. They fear that it could lead to less passenger demand for app-based auto rickshaws.

This comes when people are already complaining about being denied by cabs booked and auto-rickshaws on Ola and Uber. When it comes to booking online cabs and auto-rickshaws, drivers often keep rejecting the bookings or call up a customer who book using the aggregator App.

On 8th December, Uber issued a statement saying that many auto drivers across India depend on Uber and another app to earn a living. Customers, especially women and the elderly, like booking an Auto via an app because of the convenience and safety that comes with it, but they also value money.

App based auto rides to costlier from 1st January 1pixabay image

Read More: Registration of vehicles more than 15 years old to cost more from April next year

Uber read statement

"This tax will lead to an increase in platform fares and a corresponding drop in demands. Drivers and riders will both lose out in the scenario. Moreover, there are also questions over whether the tax will result in revenue gains for the government.

The Indian government has announced it will impose a 5% GST on Auto rides booked online from 1st January next year, ending an existing relief. Auto rides falling on the street will continue to be GST-free.

The aggregators claim that they understand the government's need to collect revenues. The government needs to reconsider this tax as it will hurt the earnings of auto drivers and the government's digitization program.

However, the GST would not be implemented if someone dropped an auto-rickshaw. This additional charge could lead people to drop a cab as even 5% on the fare is a hike. The services provided by auto-rickshaw drivers in offline mode or manual will remain exempted.

Follow Us