Ola and Uber have confirmed that they have received a notice from the Director General of Goods and Services Tax Intelligence.

Probe against ola uber for tax evasionImage Credit: Picxy.com/dimpy16
Atom Tax evasion Monday, January 11, 2021 - 19:57

A probe has been initiated against cab aggregators Uber and Ola by the Director General of Goods and Services Tax Intelligence (DGGI), which has also issued summons to officials of both the companies. Ola and Uber have confirmed that they have received a notice from authorities.

Sources told IANS that as per the calculation by the GST arm, the tax liability 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.

This tax is reportedly calculated at the rate of 15%, which companies have not paid over many years.

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 too confirmed that is received a notice from the tax department relating to certain matters prior to 2017 in its 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 all our tax obligations and have contributed several thousand crores in taxes over the last 4 years alone,” a company spokesperson told TNM.

An investigation into Ola and Uber comes close on the heels of the I-T department conducting searches on various companies including Swiggy, Instakart, Zee Entertainment Enterprises and Larsen & Toubro for fake input tax credit.

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.

With IANS inputs

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