Ola, Uber Rides to Become Cheaper With GST Roll-Out on 1 July

Currently, a tax of six per cent is levied on rides booked through cab aggregators.(Photo: Reuters)

Cab rides could get marginally cheaper for customers with the implementation of GST from 1 July as the rate tax will come down to five percent for bookings made on cab aggregators like Ola and Uber.

Currently, a tax of six percent is levied on rides booked through cab aggregators.

Such a reduction is a welcome move for cab aggregators and consumers considering the increased demand of services of cab aggregators.

Saloni Roy, Senior Director, Deloitte Haskins and Sells

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It will provide a further boost to the already thriving operations of cab aggregators, Roy added.

The introduction of services by cab aggregators has seen manifold growth due to the ease and reasonableness of prices at which the services are offered.

“The GST rate on cab aggregators is proposed to be at 5 percent as compared to the current abated service tax rate of 6 percent. This is the rate closest in the various bands of GST rates of 5, 12, 18 and 28 per cent,” Roy said.

Amit Jain, President of Uber India and South Asia also welcomed the move.

"By ensuring that the new rate structure is not inflationary, the government has demonstrated its pro-consumer, pro-business stance," he said.

Ola did not respond to emailed queries.

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