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.
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– Central Tax (Rate), both dated 18.11.2021, whereby GST exemption applicable in respect of auto-rickshaw rides was withdrawn for services facilitated through e‑commerce operators, even though the said exemption continued to remain applicable on auto-rickshaw rides booked in offline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.
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.
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. 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.
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.
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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