The GST Council is expected to meet before mid-July, just ahead of the monsoon session of Parliament, with ride-hailing taxation and broader compliance simplification both on the likely agenda, according to reports from The Mint. This timeline positions the meeting as a crucial opportunity to address long-standing taxation issues in the ride-hailing sector, as the council now looks into the taxation disparities that have created different treatment for passengers using the same roads and destinations. The meeting will also focus on reforms to ease the GST process and reduce tax disputes, as reported by recent updates.
While app-based ride-hailing services currently attract 5% GST on ride fares, there is an ongoing debate centred on how the tax should apply to subscription-based and discovery-only platform models. The confusion stems from Section 9(5) of the Central GST Act, which makes e-commerce operators responsible for paying 5% GST on passenger fares. Commission-based platforms like Uber and Ola work well under this framework as they collect fares, take their cut, and pay out drivers, with the platform controlling the transaction. However, this creates a stark contrast when passengers book similar rides on subscription-based platforms, where they might not pay any GST at all.
Newer platforms, with Rapido being the most prominent example, operate on a subscription model where drivers pay a fixed daily or weekly fee to access the app, and fares are settled directly between driver and passenger with the platform playing no role. These platforms argue that there is no aggregated fare for them to levy GST on, with the 18% GST covering only the subscription fee. State-level tax authorities have reached contradictory conclusions on this issue, as reported by The Mint. Karnataka's Advance Ruling Authority declared that Namma Yatri falls outside Section 9(5) — then ruled in a separate case that Rapido is liable, creating litigation, uncertainty, and a quiet competitive advantage for platforms that happen to be structured the right way.
Alongside the ride-hailing question, the Council is also expected to take up simplification of GST registration procedures and input tax credit rules — two areas that have frustrated businesses since the system launched in 2017. Making it easier to withdraw registration applications and bringing more predictability to ITC claims would offer genuine relief to finance teams across industries, according to The Mint. The upcoming meeting will specifically focus on reforms to ease the GST process and reduce tax disputes, addressing long-standing issues that have plagued the system since its implementation.
The July meeting, if it delivers, won't just tidy up a tax technicality but will signal whether India's GST architecture can keep pace with how platform businesses actually operate — not just how they looked when the law was written eight years ago. This represents a significant test of the GST framework's adaptability to evolving business models in the digital economy, as the current system creates completely different tax treatments for passengers using the same roads and destinations based solely on platform structure. The meeting will also address the broader goal of reducing tax disputes and improving the overall GST compliance environment.
