Happy Monday! Ride-hailing firms plan fresh appeals to the indirect tax department over GST on subscription-based services. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ Indian IT’s European spring
■ Amazon’s fresh foray
■ Zetwerk’s manufacturing push
Ride-hailing firms to seek GST clarity from tax regulator
Cab aggregator firms are preparing to make new representations to the indirect taxes department concerning the contentious issue of the applicability of Goods and Services Tax (GST) for services offered under the subscription-based SaaS model.
Jargon buster: Under the SaaS model, platforms charge gig workers a fixed subscription fee instead of pocketing a commission on each transaction. In this case, SaaS stands for “Subscription as a Service.”
Driving the news: Companies such as Rapido, Uber, and Ola plan to express their concerns regarding how the subscription model is taxed. According to sources familiar with the matter, this renewed push follows conflicting interpretations by the Karnataka Authority for Advance Rulings (AAR), leading to inconsistent treatment of the SaaS model.
Market dynamics:
Catch up quick: The 5% GST is applicable under Section 9 (5) of the Central GST Act. This provision requires ecommerce platforms, such as ride-hailing firms, food delivery companies, and online marketplaces, to collect and remit tax on behalf of service providers using their apps. These include drivers, restaurants, and ecommerce sellers.
PharmEasy founders venture out again with new startup All Home
(L-R) Dharmil Sheth, Dhaval Shah, and Hardik Dedhia, founders, PharmEasy
Three cofounders of PharmEasy, who exited their executive roles earlier this year, have launched a new startup focused on the architectural and interior design sector.
Tell me more: Dharmil Sheth, Dhaval Shah, and Hardik Dedhia have launched All Home, which plans to back consumer-facing brands across various categories, including sanitaryware, furniture, kitchen and wardrobe, and home hardware. The venture will invest in these brands while offering a mix of technology support, digital-first manufacturing and distribution capabilities, and market intelligence.
Key details:
Quote, unquote: “Consumers are increasingly willing to invest in their living and working spaces, yet often lack access to the appropriate channels and products. Our platform aims to address this gap,” Dhaval Shah said.
IT’s Europe deal momentum is up after three slow quarters
With Indian IT firms facing headwinds in their largest market, the United States, due to policy and trade uncertainties, Europe has emerged as a bright spot. After three subdued quarters, deal activity across the continent has gained momentum.
Numberwise:
Deal book:
Amazon India enters at-home diagnostics space, expands healthcare vertical: The ecommerce giant has teamed up with Orange Health Labs to introduce its diagnostics service, allowing home sample collection within 60 minutes and providing test results in under six hours for routine tests.
Zetwerk set to pump Rs 500–800 crore for component making: The Bengaluru-based unicorn is seeking to invest in the manufacturing of printed circuit boards (PCBs), enclosures, and electromechanical components such as heat sinks and sensors, while preparing an application for the government’s PLI scheme.
Infosys’ Bengaluru, Chennai centres top April on-site attendance: Infosys’ development centres in Bengaluru, Chennai, and Pune had the highest on-site attendance in April, while the offices in Nagpur, Indore, and Gurgaon recorded the lowest.
Global Picks We Are Reading
■ The $10 billion delivery empire built on Shein and TikTok orders ( Rest of World)
■ How to out-troll the trolls, as told by the internet’s foremost posters ( Wired)
■ You sound like ChatGPT ( The Verge)
Also in the letter:
■ Indian IT’s European spring
■ Amazon’s fresh foray
■ Zetwerk’s manufacturing push
Ride-hailing firms to seek GST clarity from tax regulator
Cab aggregator firms are preparing to make new representations to the indirect taxes department concerning the contentious issue of the applicability of Goods and Services Tax (GST) for services offered under the subscription-based SaaS model.
Jargon buster: Under the SaaS model, platforms charge gig workers a fixed subscription fee instead of pocketing a commission on each transaction. In this case, SaaS stands for “Subscription as a Service.”
Driving the news: Companies such as Rapido, Uber, and Ola plan to express their concerns regarding how the subscription model is taxed. According to sources familiar with the matter, this renewed push follows conflicting interpretations by the Karnataka Authority for Advance Rulings (AAR), leading to inconsistent treatment of the SaaS model.
Market dynamics:
- Rapido currently uses the subscription model for its autorickshaw and four-wheeler ride-hailing services.
- Uber has implemented the model for its three-wheeler offerings.
- Ola Consumer, which first adopted the subscription approach for autorickshaws, expanded it to include four-wheeler taxi services earlier this month.
- ONDC-backed Namma Yatri has operated on a subscription basis since its inception, offering autorickshaw rides without a commission.
Catch up quick: The 5% GST is applicable under Section 9 (5) of the Central GST Act. This provision requires ecommerce platforms, such as ride-hailing firms, food delivery companies, and online marketplaces, to collect and remit tax on behalf of service providers using their apps. These include drivers, restaurants, and ecommerce sellers.
PharmEasy founders venture out again with new startup All Home
Three cofounders of PharmEasy, who exited their executive roles earlier this year, have launched a new startup focused on the architectural and interior design sector.
Tell me more: Dharmil Sheth, Dhaval Shah, and Hardik Dedhia have launched All Home, which plans to back consumer-facing brands across various categories, including sanitaryware, furniture, kitchen and wardrobe, and home hardware. The venture will invest in these brands while offering a mix of technology support, digital-first manufacturing and distribution capabilities, and market intelligence.
Key details:
- All Home has raised $20 million in equity and debt funding.
- The startup has been valued at $120 million.
- Bessemer Venture Partners led the funding round, alongside several angel investors.
- PharmEasy CEO Siddharth Shah has also invested in the company.
Quote, unquote: “Consumers are increasingly willing to invest in their living and working spaces, yet often lack access to the appropriate channels and products. Our platform aims to address this gap,” Dhaval Shah said.
IT’s Europe deal momentum is up after three slow quarters
With Indian IT firms facing headwinds in their largest market, the United States, due to policy and trade uncertainties, Europe has emerged as a bright spot. After three subdued quarters, deal activity across the continent has gained momentum.
Numberwise:
- IT deals originating from Europe rose by around 5% compared to the previous quarter, while the US market remained flat with just 2% growth, according to US-based research firm HFS Group.
- The total value of European deals climbed to $4.08 billion between January and March 2025, up from $3.4 billion in the previous quarter and $3.5 billion in the same period last year, as per data services platform ISG.
Deal book:
- Tata Consultancy Services (TCS) signed six deals in Europe since March.
- Infosys partnered with Allied Irish Banks and the UK’s Yorkshire Building Society.
- HCLTech secured an engineering services contract with Swedish truckmaker Volvo.
- L&T Technology Services and Tata Elxsi each signed €50 million contracts with unnamed European automotive clients.
- Wipro has appointed a new CEO for its European strategic unit amid a softer outlook.
Amazon India enters at-home diagnostics space, expands healthcare vertical: The ecommerce giant has teamed up with Orange Health Labs to introduce its diagnostics service, allowing home sample collection within 60 minutes and providing test results in under six hours for routine tests.
Zetwerk set to pump Rs 500–800 crore for component making: The Bengaluru-based unicorn is seeking to invest in the manufacturing of printed circuit boards (PCBs), enclosures, and electromechanical components such as heat sinks and sensors, while preparing an application for the government’s PLI scheme.
Infosys’ Bengaluru, Chennai centres top April on-site attendance: Infosys’ development centres in Bengaluru, Chennai, and Pune had the highest on-site attendance in April, while the offices in Nagpur, Indore, and Gurgaon recorded the lowest.
Global Picks We Are Reading
■ The $10 billion delivery empire built on Shein and TikTok orders ( Rest of World)
■ How to out-troll the trolls, as told by the internet’s foremost posters ( Wired)
■ You sound like ChatGPT ( The Verge)
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