US-based Uber Inc under service tax dept scanner

After allegedly falling foul with RBI, the US-based transport app provider Uber Inc, which offers its services to around 1,200 cab operators in India's 10 top cities, has come under the scanner of the Services Tax Department.

'We have sent a tax enquiry to Uber Inc. So far, they have not paid us a single penny in taxes. We have not sent them a demand notice as they don't have an office in the country, but are operating through their Netherlands arm,' Mumbai Service Tax Commissioner SK Solanki said.

When asked what is the quantum of the money they are in default of, Solanki said: 'The department has not sent a demand notice to them but an enquiry, seeking clarifications.

'Their headquarters has informed us that some representative from their Netherlands office will meet us. We will issue them a demand notice after getting their response because we are not sure who is liable to pay the tax — Uber or the cabbies. But someone has to pay,' he said.

Uber has become popular by offering luxury car rides for a little more than the regular fare. The service tax notice to Uber makes it the first such demand to a foreign service provider in the e-commerce space in the country. The San Francisco-based Uber Inc claims to be the world's largest transport app service provider by online aggregation of luxury cab operators, and has been under legal and regulatory lens in almost all the markets it operates in like the home market US, Germany, Britain, Poland, Brazil, Korea, among others. It is present in over 200 cities globally. In August this year, RBI had asked it to stop receiving payments with single-factor authentication from 31 October, which would effectively mean that it will have to shut shop by the end of the month here. When told that Uber claims it is not in default, Solanki said: 'I don't understand how they are different from any other taxi operator like Meru, TabCab etc who all pay service tax. We are very sure that either Uber pay us the tax or cabbies do so. But getting it from some 1,200 cabbies individually is not easy.'

When contacted for response, Uber communications head for APAC Region, Evelyn Tay said:  'Uber complies with all applicable tax laws, and pays the relevant tax in every territory it operates in. All payments on the Uber system are cashless and fully traceable in an industry that has been notoriously cash-based for years.