DGGI starts probe against Uber, Ola over alleged GST evasion

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The Director General of Goods and Services Tax Intelligence (DGGI) has initiated a probe against cab aggregators Uber and Ola over evasion of GST and issued summons to the officials of the companies.

According to sources, as per the calculation by the GST arm, the tax liablity of Uber India stands around Rs 800 crore, while that of Ola Cabs is around Rs 300 crore.

Official sources said that probe by the GST intelligence arm found that both the cab aggregators have not paid GST on the incentives paid to the drivers.

Further, both the ride hailing majors have allegedly not paid the GST on the charges levied from customers for cancellation of rides.

Commenting on the development, 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."

Ola, however, did not immediately respond on the matter.

Sonam Chandwani, Managing Partner at KS Legal & Associates, said: "The DGGI's crackdown on cab aggregators like Uber India and Ola Cabs unravelled tax evasions on account of the failure of GST payment on incentives to drivers. This significant finding compelled the DGGI to issue summons to both cab aggregators setting a stringent tone in light of rising tax evasions amidst the pandemic."

She was of the view that with the GST's law enforcement agency on high alert, undertaking data analytics to identify, and penalise offenders and ensure better compliance and transparency in tax payment matters, tax collection is likely to receive a fillip.

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