GST on Ride-Hailing Platforms: Industry Flags SaaS Model Mismatch, Seeks Clarity

• India's app-based mobility sector has approached the Finance Ministry seeking clarity on Section 9(5) of the CGST Act, 2017.
• The industry highlights a structural mismatch between the current GST framework and emerging platform business models, particularly SaaS-based platforms.
• Section 9(5) mandates a 5% GST on ride fares to be collected by e-commerce operators, treating platforms as suppliers for tax purposes.
• SaaS platforms, unlike traditional aggregators (Uber, Ola), do not intermediate payments, creating 'impossibility of compliance' as they don't collect fares.
• The industry seeks a clear distinction between aggregator-led and SaaS-based platforms, requesting an exemption for platforms not controlling payment flows to ensure driver welfare and consumer affordability.