Increase Driver Income. Keep India’s Digital Mobility Open.
A direct appeal to the elected Government: hear Rapido, drivers and Indian technology businesses before the detailed GST treatment recommendation is settled internally by a few tax administrators.
TLGS Consulting Group Private Limited represents Roppen Transportation Services Private Limited (Rapido) in this GST Council matter. This article presents TLGS’s policy position alongside identified public sources.
The recommendation is broad. The passenger-platform question still needs a precise answer.
The 8 October 2026 Ministry of Finance release recommends amending Section 9(5) to clarify ECO liability for notified services irrespective of business model. It also says that the relevant legal instruments will give the recommendations effect. The release is not the final legislative text. [1]
TLGS does not read this high-level statement as an answer to every feature of the technology-only passenger model in its representation. The detailed minutes and operative wording are not part of the verified material assessed here. We seek an express answer on that model before the language is settled.
This is an opportunity for detailed engagement, not a reason to assume that the representation has become irrelevant. The question is whether software that connects independent people should carry the same ride-tax responsibility as a business that controls their transaction.
More of the fare should reach the person who earns it.
A driver choosing between a deduction on every trip and a smaller fixed app charge has a clear economic interest. For the same fares and rides, the lower platform charge leaves more income with the driver. This is the central benefit of the no-commission approach—not merely a change in billing vocabulary.
In an assumed ₹400 ride, a 20% commission takes ₹80 and leaves ₹320 after the platform charge. A ₹100 daily app pass spread over ten rides costs ₹10 per ride, leaving ₹390. The driver retains ₹70 more from the same fare.
A better driver income need not mean a higher passenger fare.
In the same illustration, a ₹360 fare still leaves the driver ₹350 after the ₹10 app cost. Compared with the commission example, the passenger saves ₹40 and the driver retains ₹30 more. Lower distribution costs create room for both benefits.
Our proposed test also excludes an app that enforces the final fare or a surge multiplier. No app-imposed surge would be a condition of the proposed technology-only treatment. It is not a claim that every current Rapido product already meets the test, or that a driver’s independently agreed price can never change with demand. Rapido should be able to qualify by making and demonstrating the required operational changes.
An app is not a ride. A software fee is not a passenger fare.
The app’s customer is the driver, while the transporter’s customer is the passenger. Rapido has publicly argued that imposing fare GST alongside GST on its subscription creates a double-tax burden for its model. The important issue is the legal basis for adding the other supplier’s liability, not a comparison of how much revenue each tax base produces. [3] [9]
Our objection is to an unjustified additional layer of liability on a genuine software supplier. Section 9(5) already shifts liability for notified services supplied through an ECO. The disputed boundary is when that condition is met, and how far it should extend. Ease of collection cannot answer that question by itself. [2]
The same driver. The same vehicle. Why should neutral discovery change the tax result?
Consider a street-hailed auto-rickshaw journey that is exempt, compared with covered app-booked auto travel subject to GST. That online/offline distinction is real. Our question is why a platform that only provides discovery and software access should be equated with one that organises the ride. [8]
Digital access should not become a disadvantage for the small independent supplier. The tax administrators should explain which additional functions justify the different treatment.
This is a request for a reasoned equality and classification assessment of the proposed model. The legal significance of the differences must be examined—not assumed away through the word “uniformity”.
Section 9(5) already differentiates. Uniformity is not the same as sameness.
Section 9(5) is itself an exception to ordinary supplier-based liability. Its notified-service framework contains distinctions: the housekeeping entry, for example, excludes cases where the service supplier is liable for registration under Section 22(1). The system is not built on one undifferentiated treatment for every service and supplier. [2] [7]
The October recommendations also separately provide 5% without input tax credit for specified delivery services, alongside a registration-based boundary for the proposed delivery ECO liability. These are category-specific choices. [1]
Test the conduct—not the label, the logo or the size of the investor.
Mobility platforms can combine very different functions. Fare and surge control, incentives, payment settlement, fleet ownership or leasing, driver employment, acceptance rules and service guarantees are not interchangeable with software access. These are possible features to examine, not claims that every named company performs all of them.
These questions make the proposed distinction auditable. All material conditions must be met in the contracts and the operating product. Rapido receives no automatic qualification; neither should an eligible competing platform be excluded by brand. Safety, identity checks and statutory consumer protections remain essential.
Administrative convenience cannot write India’s digital future.
The tax bureaucracy’s preference for a convenient collection point cannot be the sole measure of a sound digital-economy policy. CBIC’s administrative task must serve the elected Government’s wider goals for livelihoods, innovation and competition—not replace them.
The answer to a complex industry is better examination, not the removal of distinctions. TLGS proposes a centrally coordinated assessment of each relevant platform model: review its product, contracts, pricing and money flows once; document the result; require notice of material changes; and use risk-based audits. This need not mean a fresh classification inquiry into every individual ride.
If staffing, tools or coordination are constraints, address those constraints. Do not make them a reason to deny a workable technology-only category without testing it. The administration should identify what cannot be verified and why, allowing the industry to demonstrate a practical solution.
India’s innovation opportunity is bigger than a tax-rate comparison.
The argument is not that an 18% app-service rate, by itself, creates startups. It is that a clear distinction for genuine technology-only services leaves room for different business structures. Tier-2 and Tier-3 founders, including young and Gen Z developers, can solve local problems without first building the commercial machinery of a large aggregator.
Such a model removes particular funding and operating burdens. A blanket approach risks narrowing competition to those able to finance a more complex structure. The appropriate question is how to keep entry open while enforcing clear conditions.
NITI Aayog’s DPI@2047 for Viksit Bharat roadmap links digital infrastructure with inclusion, livelihoods, MSME access and wider participation. We ask that passenger-platform policy be examined against that national ambition. [6]
There is also a resilience argument: India benefits from multiple capable domestic providers, not dependence on any single global or local platform. This is a case for stronger Indian capacity and choice—not a prediction that a particular foreign company will leave India, or a nationality-based tax exemption.
The market is moving towards no commission. Policy should not move it backwards.
Rapido’s published Auto and Cab terms describe subscription-based software access, a fare agreed by driver and passenger, and direct collection by the driver. Uber’s July 2025 Auto announcement also describes no trip-level commission and direct payment. In June 2025, Ola announced a nationwide zero-commission model using driver-selected access plans. The announcements concern their stated products and periods. [3] [4] [5]
TLGS’s assessment is that the appeal of keeping more of each fare creates competitive pressure on the traditional Uber/Ola-style percentage-commission approach. That pressure is worth preserving. Drivers should be able to choose a lower-cost challenger, and challengers should be able to compete through a different operating structure.
Tax policy must not become a means of preserving a foreign MNC’s commercial model or market share at the expense of Indian interests. The question is what a rule does to competition, not which company supports it. The appropriate inquiry is whether the operating functions justify liability—not whether a challenger’s prices or growth unsettle established business models.
A direct appeal to the elected Government: hear the industry before the detailed position is fixed.
TLGS’s account is that its representation has not received the focused joint examination sought from the Revenue Secretary’s office and CBIC, involving the proposing platform, driver representatives and independent technical expertise. Submissions have taken place; our concern is that they have not resolved the conduct-based test in a shared, substantive hearing.
The Council and its officers handle many issues. That makes a dedicated examination more important, not less. The consequences extend to everyday journeys, driver earnings and the opportunity for Indian technology businesses to grow. These are matters of economic policy, not collection procedure alone.
We therefore appeal to the Prime Minister’s Office and the Ministry of Finance to support an early joint meeting and a broader stakeholder examination. CBIC and State tax administrations should contribute alongside affected platforms, driver associations, consumer representatives, independent technology specialists and tax experts. A tax-officer-only process cannot supply every operational and livelihood perspective.
Smaller Indian businesses should not feel that only large multinational platforms can shape the debate. Invite competing businesses to the same table, record their differing operating structures, permit a demonstration, examine objections and publish the reasons for the resulting approach.
Choose the legal instrument after understanding the model.
The examination can inform a Section 168 clarification where the distinction is supportable within the existing Act, or appropriately framed legislation amending Section 9(5) where statutory change is required. The point is to settle the operational question first and then use the legally competent route. [2]
Questions about constitutional validity, the scope of a deeming provision and particular tax demands remain for the appropriate legal forums. They need not prevent the elected Government from hearing a practical proposal now.
Increase driver income. Give passengers choice. Let Indian software businesses compete. Hear the facts before fixing the rule.
Editorial basis: the identified October recommendation, public company materials and TLGS’s stated representation. A passenger-platform safeguard is sought, not reported as granted. Published 11 October 2026; revised the same day.
Sources & reference notes
[1] Ministry of Finance / PIB: recommendations of the 57th GST Council meeting, 8 October 2026.Item 18.2; delivery-services recommendations; closing implementation note. The official release copy is held in the project record. No passenger carve-out is inferred from the delivery rate.
[2] CBIC: Central Goods and Services Tax Act, 2017.Sections 2(44), 2(45), 9(1), 9(5) and 168: electronic commerce, supplier liability, the ECO provision and directions to tax officers. Linked page is the original Act text, not the proposed amendment.
[3] Rapido: Captain Terms, Auto and Cab section.Discovery access, agreed fare, subscription and direct payment. These are the company’s published contractual terms, not independent certification of every product’s tax position.
[4] Uber: Auto SaaS explanation for riders, 31 July 2025.Company description of no trip-level commission, direct payment and fare agreement for that product.
[5] PTI / Business Standard: Ola’s zero-commission announcement, 17 June 2025.Reports Ola’s statement about nationwide access plans. The competitive implications in this article are TLGS’s assessment; this report does not establish lobbying motives.
[6] NITI Aayog: DPI@2047 for Viksit Bharat, April 2026.National digital-development context: inclusion, livelihoods and enterprise participation. Not an endorsement of a particular GST classification.
[7] Notification 23/2017–Central Tax (Rate), 22 August 2017.The housekeeping-services entry includes the Section 22(1) registration exception. It is a distinct service entry, not a general exemption for passenger platforms.
[8] Delhi High Court: Uber India Systems v. Union of India, 12 April 2023, 2023:DHC:2489.Judgment text reproduced by Indian Kanoon. It records the online/offline issue and upheld the challenged notifications. The argument here is for examination of the proposed functional distinction, not a claim that the court has struck down the framework.
[9] Financial Express: Rapido’s public GST position, 24 February 2026.Reports Rapido’s argument concerning GST on subscription and passenger fares. A company contention, not a legal ruling that two distinct supplies cannot be taxed.