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TMI Blog2021 (4) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... e "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 @ 30ps pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges. 0.10 4.3 c) Payment gateway charges (approx..) for loading money to the DYUT Wallet by Passengers, borne by the Applicant. 2.00 5 122.00 6 Add: GST @ 5% on Basic Fare 5.00 7 Gross Fare collected from the Passenger 127.00 Note 1: The sharing from Rs. 10 service charge collected will be: Rs. 9.90 is retained by the Applicant and 0.10ps is paid to the Associate Partner as his service charges. Note 2: The Applicant may also collect toll charges, luggage charges, waiting charges, cancellation charges, insurance etc., which are not shared with Associate Partner but some may be shared with Owners or Drivers. B. The applicant submits that as per the Karnataka On-demand Transportation Technology Aggregators Rules, 2016 - Rule 9 (3) - No passenger shall be charged for dead mileage and the fare shall be charged only from the point of boarding to the point of alighting. Hence the pick-up charges are paid to the driver (either as pick up cost or incentive to cover up where pick up costs are high in some other cases), by the applicant. C. The applicant submits that the drivers are covered by an insurance program and the premium amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would also mean reference to the corresponding similar provisions in the KGST Act. 5.2 We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made by Sri. Ashok Deshapande, authorized representative during the personal hearing. We also considered the issues involved, on which advance rulings are sought by the applicant, relevant facts and the applicant's interpretation of law. 5.3 The applicant, a private limited company, submitted that they propose to operate a mobile based taxi aggregation service on a pan-India basis; they are responsible for linking the driver to the passenger; they neither own any vehicle nor employ the driver; the drivers are registered with them; they utilise the services of 'Associate Partner', one or more in a district, who is responsible for the well being of the passengers and of the drivers viz., accidents etc. In the revenue breakup provided by the applicant, it is seen that they are charging GST from passengers on the basic fare paid to the driver, collecting pick up cost from the passenger, service charge, associate partner's charge and payment gateway charge. Bes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of Section 2(105) of CGST Act 2017 shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied; It is observed from para 5.3 supra and the relevant definitions quoted above that there are various suppliers for different services and the applicant apart from being a supplier is also an intermediary as a taxi aggregator. Since, the instant application is filed by the applicant, we will only discuss the question of composite supply in relation to activities performed by the applicant. We observe that the applicant is offering a platform to the passengers as well as to the drivers and is collecting service charges. The conditions for a supply to be considered as a Composite Supply are (i) the supplier (taxable person) should supply two or more taxable supplies to a recipient, (ii) the said supplies should be naturally bundled and (iii) the supplies should be supplied in conjunction with each other, in the ordinary course of business, one of which is a principal supply. In the instant case, we observe that the applicant is providing two taxable servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the foregoing, we find that the pick-up charges and basic fare are part of the service of transportation of passengers by a radio taxi and hence the applicant is liable to pay GST @ 5%, on the pick-up charges also. 5.6 The third question is related to the Associate Partner, who renders services to the passengers and to the drivers/ vehicle owners directly and the question is whether any supply of service exists between the applicant /aggregator and the Associate partner, & if yes, what is the rate at which GST has to be collected and remitted? In this regard, we observe that that the responsibility of the associate partner includes on boarding and scaling up of business by registering the passengers and owners/ drivers along with taking care of their well being during accidents etc. We find that the associate partner is providing support services to the applicant in terms of increasing the magnitude of the business by providing assistance to the applicant's customers/ users and taking care of them in time of need. Further the said services are not part of the services of transportation of passengers through the e-commerce operator and hence are not covered under Section 9(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... franchises, etc.); auctioning services other than in connection with legal procedures; reading of electric, gas and water meters; data preparation services; specialized stenotype services such as court reporting; public stenography services; other business support services not elsewhere classified. We find that the same is covered by clause (ii) of Sr. No. 23 of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, at the rate of 18 %. 5.8 The fifth question is related to the goodwill bonus being paid by passenger to the driver and on which the applicant collects the service charges, i.e whether the service charges so collected attract GST and if so at what rate? We find that goodwill bonus is a voluntary payment made by passengers when they are happy with the service provided by the drivers. It is outside the fold of basic fare charged from the passengers for the trip. The applicant collects service charge on the goodwill amount. We find that the service charge collected for facilitating the payment of goodwill amount to drivers is consideration in terms of Section 2 (31) of CGST Act, 2017 and hence is liable for GST at 18% under heading 9985 vide clause (ii) of Sr. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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