Uber India Systems Private Limited Vs Union Of India & Anr (Delhi High court)
Delhi High Court held that Notifications withdrawing the exemption from the ECOs and making the levy of GST, on the fare of non-air-conditioned stage carriage ticket booked through the electronic platform like UBER is constitutionally valid.
Facts- Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 provided unconditional exemption from payment of GST in cases of i) supply of services by auto rickshaws ii) transportation of passengers by stage carriage other than air-conditioned stage carriage. The said exemption of tax on the ‘fare’ was available to the individual auto-rickshaw driver, bus operator and the ECO irrespective of the mode of booking availed by the consumer, i.e., online/offline or offline agents.
Subsequently, the Respondents issued impugned Notification dated 18.11.2021 amending the parent Notification and thereby withdrawing the exemption to the Electronic Commerce Operators (‘ECOs’) granted vide the parent Notification for the aforesaid services.
Consequently, with effect from 01.01.2022, with respect to a booking made by a consumer through the electronic platform of an ECO for an auto-rickshaw ride or a bus ride, the ‘fare’ has become exigible to tax.
The core issue is that by way of the impugned Notifications, passenger transportation services by way of auto-rickshaws mediated by ECOs like Petitioner 1 have now been made taxable which was earlier exempted whereas autorickshaw services not mediated by platforms like Petitioner continue to be exempted.
Conclusion- The effect of the impugned Notifications in withdrawing the exemption from the ECOs and making the levy of GST, on the fare of non-air-conditioned stage carriage ticket booked through the electronic platform of Petitioner 3 is identical and not discriminatory.
The services of radio taxi, motor cabs, maxi cabs and motor cycles are also available through the Uber App of Petitioner 1 and similarly, GST is being levied under Section 9(5) of the Act of 2017 on the fare of these cabs when booked through its App. Similarly, Petitioner 1 has not objected to the said levy of GST being discriminatory. The effect of the impugned Notifications in levying GST on the fare of an auto-rickshaw ride booked through the Uber App is identical and not discriminatory.
Held that the conclusions drawn by this Court is that a) the Clauses (iii) and (iv) of Notification No. 16/2021- Central Tax (Rate) and Clauses 1(i) and 2(i) of Notification No. 17/2021- Central Tax (Rate), both dated 18.11.2021 are not violative of Articles 14, 19(1)(g) and 21 of the Constitution
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Present writ petitions have been filed by Uber India Systems Private Limited in W.P.(C) No. 14048 of 2021 (‘Petitioner 1’), Pragatisheel Auto Rickshaw Driver Union in W.P.(C) No. 14579 of 2021 (‘Petitioner 2’) and IBIBO Group Private Limited along with Make My Trip (India) Private Limited in W.P.(C) 14826/2021 (collectively referred to as ‘Petitioner 3’). The petitions have been filed challenging the Clauses (iii) and (iv) of Notification No. 16/2021- Central Tax (Rate) and Clauses 1(i) and 2(i) of Notification No. 17/2021 – Central Tax (Rate), both dated 18.11.2021 [‘impugned Notifications’], as ultra vires to the Constitution of India (‘Constitution’) and Section 9(5) and 11 of Central Goods and Service Tax Act, 2017 (‘the Act of 2017’).
1.1 All these petitions were heard together and are being disposed of by this common judgment.
2. The factual background that has given rise to the present batch of writ petitions are dealt herein under.
2.1 The Respondents issued Notification No. 11/2017 dated 28.06.2017 notifying the rate of tax on supply of services. The relevant portions of Notification No. 11/2017 read as under:
“Notification No. 11/2017-Central Tax (Rate)
New Delhi, the 28th June 2017
G.S.R. 690(E) – In exercise of the powers conferred by sub-section (1), subsection (3) and sub-section (4) of section 9, sub-section (1) of section 11, subsection (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:-
Table
