Ride hailing, aggregators and the driver's registration question

A platform, a driver who is not registered, and a passenger who pays one price. The liability has to sit somewhere.

Anandaday Misshra, Founder and Managing Partner, AMLEGALS · 6 min read · updated 3 September 2026
The short answer

Passenger transportation services supplied through an electronic commerce operator by way of radio taxi, motor cab, maxi cab and motor cycle are notified under Section 9(5), so the operator pays the tax as if it were the supplier and the driver does not. The disputes concern the rate applicable to different vehicle categories and models, the treatment of the platform's own subscription or convenience fees, and the position where the driver contracts directly with the passenger using the platform only as a technology service.

The structural question

Where the supply of passenger transportation is made through the platform, Section 9(5) places the liability on the operator.

Where the platform provides only a technology service to the driver, and the driver contracts with and collects from the passenger, the analysis differs and the platform's supply is the technology service.

That distinction has produced litigation and advance rulings, because the commercial models differ between platforms and have changed over time.

Where the platform charges the driver a subscription rather than a commission, and the driver collects the fare, the platform's position is that Section 9(5) does not apply. The department's position varies.

The recurring issues

Rate differences between vehicle categories and between air conditioned and non air conditioned stage carriage, and the exemption entries for specified transportation.

Motor cycle and auto rickshaw transportation, where the entries and the exemptions have changed and the position for the period must be verified.

Convenience fees and cancellation charges collected from passengers, and their classification.

Driver incentives, which are payments by the platform to the driver and raise the question whether they are consideration for a service by the driver to the platform.

Credit for the platform, which pays tax under Section 9(5) and incurs technology and marketing costs, with the utilisation position to be examined.

What to do on Monday

  1. Document the commercial model precisely, because the liability follows it.

  2. Map each vehicle category to its rate or exemption entry, with effective dates.

  3. Classify convenience, cancellation and subscription charges expressly in the terms of service.

  4. Take and record a position on driver incentives.

On your own facts

This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.

Write to the GST practice

Questions we are asked on this

Does the driver need to register?

For supplies through the platform notified under Section 9(5), the operator pays and the driver's registration position depends on its other supplies and turnover.

Does the model matter?

Materially. Whether the supply is made through the platform or the platform supplies only technology to the driver changes the liability.

Are cancellation charges taxable?

Circular 178/10/2022-GST treats certain cancellation charges as consideration for facilitation. Analyse the specific charge.

Are driver incentives taxable?

Examine whether they are consideration for a supply by the driver to the platform, or a reduction in the platform's charge. Document the basis.

Which rate applies to auto rickshaw rides?

The entries and exemptions have changed. Verify for the period and the vehicle category.

In this cluster

GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.