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Ola, Uber to Get Costlier as Government brings new GST rule

With the new GST rules, the prices of Ola and Uber may rise as the Centre will collect 5% GST for booking 3 wheeler vehicles from January 1. Food delivery apps are also following the same procedure, with every order they will now attach a separate GST charge in the customer’s bill.

This rule will widen the tax base and those who were outside the GST reach will have to give GST when they sign up for these online platforms.

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Now, restaurants registered under GST are collecting taxes from the customers directly and deposit to the government. From Sunday onwards, the footwear stores and brands have to provide 12% taxes. These are among the many changes that came into effect this New Year.

To tackle tax evasion, the GST law is amended to see that the input tax credit is only available once the credit is appearing in the GSTR 2B of the taxpayer. 5% provisional credit was allowed previously in the GST rules but now it is not.

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The other rules that are added is including mandatory Aadhaar card authentication for claiming GST refund, blocking GSTR-1 (if businesses have not paid taxes) and filing of GSTR-3B.

EY India Tax Partner Bipin Sapra said “this change will have an immediate impact on working capital of taxpayers who are currently availing credit of 105 per cent of matched credit. The change will also mandate industry to validate that the procurements are made from genuine and compliant vendors.”

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So, the prices of cab services might go up along with the food delivery services from this year. The aggregators, however, offer good discounts to keep their customers hooked making good profits for themselves as well.

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