GST Intelligence probe over alleged tax evasion

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The Director General of Goods and Services Tax (GST) Intelligence has started an investigation into Uber and Ola. The DGGI has issued summons to officials of the two cab aggregators in relation to alleged tax invasion to the tune of hundreds of crores.

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The DGGI has calculated a lability of around Rs 800 crore in tax dues from Uber India Private Limited. The liability of Bengaluru-based Ola Cabs has been fixed at around Rs 300 crore.

Both cab aggregators have confirmed that an investigation is being conducted by the DG-GST Intelligence. However, they have not commented on the tax liability.

Modus Operandi

The modus operandi of tax evasion in both the companies is alleged to be similar. GST Intelligence has apparently found that Uber India and Ola Cabs do not pay GST on the incentives paid to drivers. Explaining, a source close to the development said: “The companies have not been paying GST on incentives they pay to their drivers, which add up to a significant amount. And this has been happening for the last several years. So, the amount on which they have not paid taxes is huge.”

Secondly, the companies have allegedly not paid the GST amount on ride cancellations. When a customer cancels a trip, he or she is charged some amount but the ride hailers have allegedly not paid any GST on this amount.

Uber, Ola reactions

Speaking to Moneycontrol, an Uber spokesperson said: “Uber is a law abiding and compliant company. We are working closely with the authorities on all tax-related queries and will respond accordingly.”

Similarly, responding to a query on the probe, Ola Cabs said: “We are in receipt of a notice from the tax department relating to certain matters prior to 2017 in our mobility business. These pertain to the erstwhile service tax regime. We have been actively engaged with the department and are cooperating with the tax authorities and are confident that we will be able to resolve this satisfactorily. Ola is a proud taxpayer and we comply with our tax obligations that contributed several thousands of crores in taxes over the last four years alone.”

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