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M/s Roppen Transportation Services Private Limited Vs. Union of India and 3 Others (Telangana High Court): Appeal NO. : WP 36254/2021 ; Registration Date 24/12/2021

Telangana HC issues Notice to Govt on Roppen Transportation Services Private Limited’s Plea challenging Withdrawal of GST Exemption on Auto Rides through E‑Commerce Operators.

Prayers Made by Appellant

i. issue a writ order or direction more particularly in the nature of a Writ of Mandamus declaring the Impugned Notification No 16/2021 Central Tax Rate dated 18/11/2021 and Impugned Notification No 17/2021 Central Tax Rate dated 18/11/2021 issued by the Respondent No 1 as being arbitrary discriminatory unreasonable irrational and violative of Article 14 and Article 191g of the Constitution of India and to consequently set aside the same

ii. to direct the Respondents, their servants, agents and subordinates from, directly or indirectly giving effect to the Impugned Notification No 16/2021 Central Tax Rate dated 18/11/2021 and Impugned Notification No 17/2021 Central Tax Rate dated 18/11/2021, issued by the Respondent No 1 and consequently, restrain them from taking any coercive action against the Petitioner on account of the above mentioned Impugned Notifications, pending disposal of the above writ petition

iii. to stay the operation of the Impugned Notification No 17/2021 Central Tax Rate dated 18/11/2021 issued by the Respondent No 1, pending disposal of the above writ petition

iv. to stay the operation of the Impugned Notification No 16/2021 Central Tax Rate dated 18/11/2021 issued by the Respondent No 1, pending disposal of the above writ petition.

Poniters

1. The Telangana High Court has issued the notice to the government on the plea filed by the Roppen Transportation Services Pvt. Ltd. (Rapido) challenging withdrawal of exemption on auto rides through e-commerce operators.

2. The Government recently issued Notifications 16/2021- Central Tax (Rate) and 17/2021 – Central Tax (Rate), both dated 18.11.2021, whereby GST exemption applicable in respect of auto-rickshaw rides was withdrawn for services facilitated through e‑commerce operators, even though the said exemption continued to remain applicable on auto-rickshaw rides booked in offline mode. This notification, which comes into effect from 1st January 2022, would result in a fare increase of 5% on auto-rickshaw rides booked through e-commerce apps.

3. The petitioner, Rapido challenged the said Notifications as being arbitrary, discriminatory, irrational, and violative of Article 14 and Article 19(1)(g) of the Constitution of India, the Telangana High Court has issued notices to the Government, CBIC, and the Jurisdictional Commissionerate.

4. The notifications were assailed on the grounds that the welfare objective in exempting public transport including transportation by auto-rickshaw stands frustrated on account of the said Notifications and discriminates between the services by auto-rickshaw drivers through the platform and the services provided in offline mode by the auto-rickshaw drivers.

5. Further, that the Notifications are violative of the doctrine of a level playing field and are prejudicial to the business interests of the e-commerce operators like Rapido.

6. It was also argued by the Company that the said notifications created an unreasonable classification as the service remained the same, whether it be offline or online.

7. The division bench of Justice Ujjal Bhuyan and Justice Chillakur Sumalatha while listing the matter on January 21, 2022, issued Notice on the writ petition as well as on the stay application.

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