In re Kou-Chan Technologies Private Limited (GST AAR Karnataka)
1. Do the various supplies (of the applicant, the vehicle owner, the driver and the associate partner together) qualify as Composite supply?
No, it’s not a composite supply.
2. Do the pick-up charges paid to the owner / driver fall under GST rate of 5%?
Yes, the pick-up service is incidental to the main service of transportation of passengers by radio taxi and hence the pick-up charges form part of the service of transportation of passengers by a radio taxi and hence the applicant is liable to pay GST @ 5%, on such pick-up charges.
3. The Associate Partner renders services to the passengers and to the drivers/ vehicle owners directly, and in that case does any supply of service exist between the applicant /aggregator and the Associate partner, and if yes, what is the rate at which GST has to be collected and remitted?
18 % by associate partners in case the associate partner is registered under GST. Where the associate partners are not registered under GST, no GST is leviable on the amount remitted to the associate partner.
4. Does the amount received from drivers/ owners towards bidding get covered in the 5 % GST or should it be separately charged at 18%?
It should be paid at 18%.
5. Does the goodwill bonus being paid by passenger to the driver and on which the applicant collects the service charges, attract GST and if so at what rate?
Yes at 18 %.
6. Do the charges for cancelling the trip for any reason attract GST liability?
Yes at 18 %.
7. Do the charges for insurance come under composite supply?
8. If the principal supplier / applicant collects GST, say at 5% along with fare from passengers (as mentioned in the Table submitted by the applicant), does it amount compliance of the GST Rules?
No. the applicant needs to discharge 18% on its other income as discussed above.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, (Karnataka)
1. M/s Kou-Chan Technologies Pvt. Ltd., # 205, Brigade Gardens, 19, Church Street, Bengaluru-560 001 (hereinafter referred as ‘applicant’), having GSTIN: 29AAACE7439E1ZL, filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017 and under Section 97 of the KGST Act, 2017 read with Rule 104 of the KGST Rules 2017, in FORM GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. M/s. Kou-Chan Technologies Pvt. Ltd., is a Private Limited Company registered under the Goods and Services Tax Act, 2017 and proposes to operate a mobile based taxi aggregation service, on a pan-India basis under the trade name “DYUT RIDES”. Thus the applicant sought advance ruling in respect of the following questions:-
a. Do the various supplies (of the Applicant, the Vehicle Owner, the Driver and the Associate partner together) mentioned supra qualify as ‘Composite Supply ‘?
b. Do the pick-up charges paid to the Owner/ Driver fall under GST rate of 5%?
c. Do the service charges collected from the passengers fall under GST rate of 5%? In this connection a reference may be made to Notification No. 11/2017-Central Tax (Rate), dated 28.06.2017 – Sl.No.8.
d. The Associate Partner renders services to the Passengers and to the Drivers/ Vehicle Owners directly, and in that case does any supply of service exist between the Applicant/Aggregator and the Associate Partner, and if yes, what is the rate at which GST has to be collected and remitted? It may be noted that the Associate Partner is paid up to 10ps per transaction as explained in the above said example.
e. Does the amount received from the Owners / Drivers towards bidding get covered in the 5% GST or should it be separately charged at 18%? It may be noted that to participate in the bid, the drivers have to pay to the Applicant @ 3 Ops per bid and GST.
f. Does the Goodwill Bonus being paid by Passenger to the Driver for good service and on which the Applicant collects the service charges, attract GST and if so at what rate?
g. Do the charges for cancelling the trip for any reason attract GST liability?
h. Do the charges for insurance come under composite supply?
i. If the Principal supplier/Applicant collects GST, say at 5% along with fare from Passengers (please see table above) and remits that amount, does it amount to compliance of the GST rules?
3. RELAVENT FACTS OF THE CASE
a. The applicant has a unique business model comprising of three entities, first, the applicant as the Taxi Aggregator’, second, an In-charge for each District known as ‘Associate Partner’ (usually a proprietor or single individual) and third, the Taxi Driver’/ ‘Owner’.
