In short
| Item | What applies | Since | Good to know |
|---|---|---|---|
| Taxi, cab or bike ride booked through an app | The app pays the GST | 1 Jul 2017 | You leave these rides off your own GST invoice. |
| Auto, bus or any other vehicle booked through an app | The app pays the GST | 1 Jan 2022 | Since 20 Oct 2023 a bus operator that is a company pays its own GST. |
| AC bus (stage or contract carriage) | 5%, no input credit | 1 Jul 2017 | A bus rented with driver and fuel may also fit the cab-hire 5%/18% options; the law does not say which entry wins (our reading). |
| Non-AC route bus, auto, metered cab, booked offline | Exempt | 1 Jul 2017 | A non-AC bus hired for a tour or charter is not exempt. |
| Bus or coach hired with driver and fuel | 5% or 18% | 22 Sep 2025 | Same options as cab hire; the 18% option was 12% before. |
| School transport billed to the school | Exempt | 1 Jul 2017 | Pre-school to higher secondary only; colleges are taxed. |
| Buses hired to a State Transport Undertaking | Exempt | 1 Jul 2017 | E-buses hired to a local authority: exempt since 1 Aug 2019. |
Current, upcoming and expired rules
Current is what applies today. Upcoming is notified and starts later. Expired shows what applied before, from which date to which date, for when an old invoice or a notice asks.
Rules as on 31 Oct 2026 (India time). A rule moves between the tabs on its own when its start or end date passes.
| Rule | Rate | Dates | Law and source |
|---|---|---|---|
| App-booked bus rides: company bus operators pay their own GSTThe app operator pays the GST on rides by any vehicle except buses, and on bus rides only where the bus operator is not a company. A bus company charges and pays the GST itself.Our reading: Whether a subscription-only app that does not set or collect the fare must pay GST on the rides is not settled. The Karnataka advance ruling authority said yes for Opta Cabs (2018) and no for Juspay's Namma Yatri app (2023), and we found no CBIC circular on it. Ask your CA before relying on either view. | App paysCode 996412 / 996411 | Since 20 Oct 2023 | 16/2023-CT(Rate), amending 17/2017-CT(Rate) Checked against the textNotification 16/2023-CT(Rate)Karnataka AAR, Opta Cabs (2018)Karnataka AAR, Juspay / Namma Yatri (2023) |
| Autos and metered cabs: exempt offline, taxed through appsRides booked offline stay exempt. Rides booked through an app lost the exemption, and the app operator pays the GST on them. | Exempt offlineCode 996411 | Since 1 Jan 2022 | 16/2021-CT(Rate), proviso to S.No. 17 of 12/2017; 17/2021-CT(Rate) Checked against the textNotification 16/2021-CT(Rate) textNotification 17/2021-CT(Rate) |
| Non-AC buses: exempt offline, not when the app paysBookings made directly with the bus operator stay exempt. Rides booked through an app where the app must pay the GST lost the exemption.Our reading: From 20 Oct 2023 the app pays on bus rides only where the bus operator is not a company. So a company running non-AC route buses keeps the exemption even when booked through an app. | Exempt offlineCode 996411 / 996422 | Since 1 Jan 2022 | 16/2021-CT(Rate), proviso to S.No. 15 of 12/2017 Checked against the textNotification 16/2021-CT(Rate) textNotification 16/2023-CT(Rate) |
| Hiring out electric buses to a local authorityGiving an electric vehicle for more than 12 passengers on hire to a local authority, such as a municipal e-bus contract, is exempt. | ExemptCode 996601 | Since 1 Aug 2019 | 13/2019-CT(Rate), S.No. 22(aa) of 12/2017 Checked against the textNotification 13/2019-CT(Rate) |
| Hiring a vehicle to a school-transport contractorGiving a vehicle on hire to someone who transports students and staff for a school is exempt. | ExemptCode 996601 | Since 25 Jan 2018 | 2/2018-CT(Rate), S.No. 22(c) of 12/2017 Checked against the textNotification 2/2018-CT(Rate) |
| AC buses (stage or contract carriage) and radio taxisTransport by AC contract carriage (other than a motorcab), AC stage carriage or radio taxi is taxed at 5%, with no credit on goods or services used.Credit (ITC): None.Our reading: From 13 Oct 2017 an AC bus or radio taxi with fuel in the price also fits the cab-hire entry with its 12% (now 18%) option. The notification does not say which entry wins, so take advice before using the higher option for these. | 5%Code 996413 / 996422 | Since 1 Jul 2017 | 11/2017-CT(Rate) S.No. 8(ii) Checked against the textNotification 11/2017-CT(Rate)Notification 31/2017-CT(Rate) |
| Hiring out buses to a State Transport UndertakingGiving a vehicle for more than 12 passengers on hire to a State Transport Undertaking is exempt. | ExemptCode 996601 | Since 1 Jul 2017 | 12/2017-CT(Rate) S.No. 22(a) Checked against the textNotification 12/2017-CT(Rate) |
| Transport of students and staff for a schoolTransporting students, teachers and staff, supplied to a school (pre-school to higher secondary), is exempt. Colleges are not covered, and the bill must be to the school, not to parents. | Exempt | Since 1 Jul 2017 | 12/2017-CT(Rate) S.No. 66(b)(i) Checked against the textNotification 12/2017-CT(Rate) |
Checked against the government text Official copy not yet online; matched across published copies The law is unclear; this is our reading
On a timeline
Each line is one rule; each bar is one period. Grey has ended, green applies today, amber starts later.
Who can claim GST credit
Input tax credit (ITC) is GST you paid on a purchase that you subtract from the GST you collect. Whether you get it depends on who you are and what you bought.
| Who | Buys | Can claim? | Condition |
|---|---|---|---|
| Cab operator on the 5% option | Cab or bus hire bought from another operator for your own customer | Yes, up to 5% | This is the one credit the 5% option allows. Since 20 Oct 2023 it is capped at 5% of the hire value: if the other operator charged 12% or 18%, the extra is your cost. From 13 Oct 2017 to 19 Oct 2023 there was no cap; before 13 Oct 2017 the 5% option allowed no credit at all. Electric-cab entries from 1 Nov 2026 have the same 5% cap.11/2017-CT(Rate) S.No. 8(vi), 10(i); 31/2017, 12/2023, 06/2026-CT(Rate) |
| Cab operator on the 5% option | Cars, servicing, tyres, insurance, software, office rent | No | The 5% option allows no credit except on hire bought from other operators.11/2017-CT(Rate) S.No. 8(vi), 10(i) |
| Any operator | Diesel, petrol or CNG | No | These fuels are outside GST, so the bill carries no GST to claim.CGST Act s.9(2) |
| Any operator | Toll paid at a toll plaza | Nothing to claim | Access to a road or bridge on payment of toll is exempt from GST, so the toll receipt carries no GST.12/2017-CT(Rate) entry 23 |
| Cab operator on the 18% option | Paid parking at a private lot, mall or airport | Yes | Private parking carries 18% GST, which you can claim when it is for your business and the bill shows your GSTIN. On the 5% option it is a cost. Parking run by a municipality itself is exempt, so there is nothing to claim.11/2017-CT(Rate) S.No. 11 (heading 9967); 12/2017-CT(Rate) entry 4 |
| A company that is not in the travel trade | A bus or tempo traveller of more than 13 seats hired for business use | Usually yes | Vehicles of more than 13 seats are outside the blocked list since 1 Feb 2019, and advance rulings in Maharashtra, Gujarat and Haryana allowed this credit. The hire must be for the business. Where staff pay part of the cost, credit is limited to the employer's share.CGST Act s.16, s.17(5)(b)(i); Maharashtra AAR (Tata Motors, 2020); Gujarat AAR (Emcure, 2022); Haryana AAAR (YKK India, 2019) |
| Another cab operator buying from you | Your cab hire, to serve its own customer | Yes | It is in the same line of business, so it can claim the GST on your bill: in full if it is on the 18% option, and only up to 5% of the hire value if it is on the 5% option.CGST Act s.17(5)(b)(i) proviso; 11/2017-CT(Rate) S.No. 8(vi), 10(i); 12/2023-CT(Rate) |
What courts and rulings have said
Judgments and advance rulings that explain a rule, including ones that pull in different directions. Weigh them by who gave them: a Supreme Court judgment binds every court in India; a High Court’s is followed by courts and tax officers in its State and is persuasive elsewhere; an advance ruling (AAR or AAAR) binds only the business that asked for it and its tax officer (section 103 of the CGST Act).
| Ruling | Question and answer | Weight |
|---|---|---|
| AAARTvl. Batcha Noorjahan (M/s. School Transport)Tamil Nadu AAAR, 23 Jun 2025Order-in-Appeal No. AAAR/3/2025 (AR) (A.R. Appeal No. 02/2025/AAAR) | Is a school-bus operator exempt when it carries only school children but the transport charges are collected directly from parents?No: the service is neither provided by nor to an educational institution, because the parents who pay are the recipients, so S.No. 66 does not apply and GST is payable. The AAAR upheld the AAR and refused to follow the Abinaya ruling.Notif. 12/2017-CT(Rate) S.No. 66(b)(i); CGST Act s.103(1)TN AAAR order, official PDF (GST Council)A2Z Taxcorp report (secondary)StudyCafe report (secondary) | Rulings differOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereDiffers in outcome from the Tamil Nadu AAR's Muniyasamy Abinaya ruling (2023), which it declined to follow. Further appeal not known. |
| AAARM/s Ion Trading India Private LimitedUttar Pradesh AAAR, 16 Mar 2020Order No. 11/AAAR/16/03/2020 (appeal against AAR Order No. 42 dated 27-09-2019) | When a company rents parking spaces and recovers exactly the same amount from the employees who use them, is that taxable and at what value?It is a supply of service, but its value is nil if the company meets the pure-agent conditions of Rule 33: it acts on the employees' authorisation, does not use the spaces for itself, and passes on exactly what it pays. Not a travel case, but it shows when a recovered expense can stay out of the taxable value.“the value of the services in the present case will be NIL, as the appellant is providing the same in the capacity of a Pure Agent”CGST Rules r.33 (pure agent); CGST Act s.7(1), s.15AAAR order PDF, scanned (GST Council)Patron Accounting summary (secondary) | Turns on its factsOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereNone known. Contrast the Tamil Nadu AAR in NTL India (2022): tolls a vehicle-rental firm recovered were part of the value. |
| AAARM/s YKK India Pvt Ltd, Bawal, Rewari (appellant)Haryana AAAR, Jun 2019HAR/AAAR/2018-19/03 (appeal against Haryana AAR ruling HAR/HAAR/R/2018-19/04 dated 11-07-2018) | Can a factory claim ITC on GST charged for hiring buses and cars, with drivers, to bring employees to work?Buses with more than 13 approved seats: yes, after the 2018 amendment; before it, no. Cars and vehicles of up to 13 seats: no ITC before or after the amendment, because the rent-a-cab and vehicle-hire block applies. This modified the Haryana AAR ruling of 11-07-2018, which had refused ITC on both.“the appellant is eligible to input tax credit of the GST charged by the Contractor for hiring of buses only having approved seating capacity of more than thirteen persons”CGST Act s.17(5)(a) and s.17(5)(b)(i) (from 01-02-2019); old s.17(5)(b)(iii) 'rent-a-cab'Haryana AAAR order, official PDF (GST Council)GST Council listing page for the order | ClarifiesOnly YKK India and its jurisdictional tax officers (s.103).No further challenge found. The order dates the change from 30 Aug 2018, when the amending Act was published, but the new section 17(5) took effect on 1 Feb 2019, so rely on that date. |
| AARM/s Juspay Technologies Pvt. Ltd. (Namma Yatri app)Karnataka AAR, 15 Sep 2023Advance Ruling No. KAR ADRG 31/2023 | Is a subscription-only ride app (no commission; auto drivers paid directly by riders) liable to pay GST on the rides under s.9(5)?No. The app is an e-commerce operator and an auto-rickshaw is a 'motorcab', but the rides are not supplied 'through' the app: it only connects driver and rider, does not collect fares and has no control over the ride. So it need not collect or pay GST on the rides.“merely connects the auto driver and passenger and their role ends on such connection”CGST Act s.9(5), s.104; Notif. 17/2017-CT(Rate)Ruling PDF, scanned (GST Council)GST Council AAR listing entryInc42 on the High Court stay of the AAR notice (secondary)Taxo on the AAR notice (secondary) | Rulings differOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereConflicts with the same authority's Opta Cabs ruling (2018). On 19 Jun 2025 the authority issued notice proposing to declare this ruling void; the Karnataka High Court reportedly stayed that notice (order not seen). |
| AARSmt. Muniyasamy AbinayaTamil Nadu AAR, 25 Aug 2023Advance Ruling No. 27/AAR/2023 | Is an unregistered school bus/van operator who will contract with schools, with permits in the schools' names, exempt on transport of students and staff?Exempt under S.No. 66(b) of Notif. 12/2017-CT(Rate), provided the service is supplied to an educational institution (school up to higher secondary) and the permits under the Tamil Nadu school-bus rules are obtained.Notif. 12/2017-CT(Rate) S.No. 66(b)(i) and para 2(y) (educational institution)TN AAR ruling 27/AAR/2023, official PDF (GST Council)StudyCafe report quoting the ruling (secondary)StudyCafe on the AAAR, citing this ruling as 27/ARA/2023 dated 25-08-2023 (secondary)Patron Accounting summary (secondary) | Rulings differOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereThe Tamil Nadu AAAR declined to follow it in Batcha Noorjahan (2025), noting that this applicant owned no vehicles and had no contracts yet; it binds only its applicant. |
| AARNTL India Private LimitedTamil Nadu AAR, 30 Jun 2022Order No. 24/AAR/2022 | Must a company renting buses and cars with drivers (employee transport for clients such as Cognizant and India Yamaha) include toll charges it pays and recovers at actuals in its taxable value?Yes. Tolls are a cost the operator incurs so its own vehicles can run the service it sold, so their recovery is a reimbursement, not a pure-agent disbursement, and GST is payable on the whole value including tolls. The question whether the toll exemption passes to the operator was not admitted, as the operator is only a recipient of the toll service.“Reimbursement of such cost is no disbursement, but merely the recovery of a portion of the value of supply made to the recipients”CGST Act s.15(2)(c) (incidental expenses); CGST Rules r.33 (pure agent); Notif. 12/2017-CT(Rate) S.No. 23 (toll exemption)Ruling PDF, scanned (GST Council)GST Council AAR listing entryLiveLaw report (secondary) | ClarifiesOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereNone known. Contrast the Uttar Pradesh AAAR in Ion Trading (2020), where a cost passed on purely as the employees' agent had nil value; there the employees alone used the parking. |
| AARM/s Emcure Pharmaceuticals Ltd, Sanand (applicant)Gujarat AAR, 12 Apr 2022GUJ/GAAR/R/2022/22 | Can a factory claim ITC on hired staff buses of more than 13 seats and on its canteen, and is GST due on staff recoveries or free transport?ITC on hiring buses with more than 13 approved seats is admissible. ITC on the canteen was held blocked under s.17(5)(b)(i). No GST on free bus transport for employees or on the employees' share of canteen charges collected and passed to the caterer.“ITC on GST paid on hiring of Bus, having approved seating capacity of more than 13 persons used for transportation of passengers, is admissible.”CGST Act s.17(5)(a), s.17(5)(b)(i) and provisoRuling text, PDF copy hosted by LiveLawLiveLaw report (secondary) | Rulings differOnly the applicant and its jurisdictional tax officers (s.103).The bus part agrees with the Maharashtra AAR (Tata Motors, 2020) and the Haryana AAAR (YKK India, 2019). The canteen part conflicts with CBIC Circular 172/04/2022, issued three months later, and with the Gujarat AAAR (Tata Motors, 2022). |
| AARM/s Tata Motors Ltd, Pimpri, Pune (applicant)Maharashtra AAR, 25 Aug 2020GST-ARA-23/2019-20/B-46 | Can an employer claim ITC on buses of more than 13 seats hired to carry staff, and what if staff pay a nominal amount?Yes, ITC is available, but only from 01-02-2019 and only for vehicles with more than 13 seats; smaller vehicles stay blocked. The nominal amount recovered from employees is not a supply, so no GST is due on it. ITC is limited to the cost the employer actually bears.“ITC is available to the applicant but only after 01.02.2019.”CGST Act s.17(5)(a) and (b)(i) as substituted w.e.f. 01-02-2019; Schedule III para 1Maharashtra AAR ruling, official scanned PDF (GST Council)GST Council listing page (date and questions) | ClarifiesOnly the applicant and its jurisdictional tax officers (s.103).No appeal found. Agrees with the Gujarat AAR (Emcure, 2022) on buses. |
| AARM/s Opta Cabs Private LimitedKarnataka AAR, 27 Jul 2018Advance Ruling No. KAR ADRG 14/2018 | If a taxi app charges drivers only a monthly usage fee, takes no commission, and riders pay drivers directly, must the app still pay GST on the rides under s.9(5)?Yes. The passenger transport is supplied to customers through the app, so the app is deemed the supplier and must pay GST on the amounts it bills on behalf of the taxi operators.“There is no doubt that the services of transportation of passengers is supplied to the consumers through the applicant”CGST Act s.9(5); Notif. 17/2017-CT(Rate) dated 28-06-2017Ruling PDF (GST Council) | Rulings differOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereConflicts with the same authority's ruling for Juspay (Namma Yatri) in 2023, on a subscription app. |
SAC and HSN codes
The code you print on the invoice: SAC for a service, HSN for goods. Since 1 April 2021 an invoice must show at least 4 digits if last year’s turnover was up to ₹5 crore, and 6 digits above that. Descriptions follow the government’s classification of services.
| Code | What it is for | Covers | GST today |
|---|---|---|---|
| 996601SAC | Renting a car, bus or coach with driver | Car or bus at the customer's disposal for a period; the customer decides routes and timings | 5% or 18% |
| 996413SAC | Local bus or coach charter | Chauffeur-driven hired bus within a city, on a set route | Taxable, AC or not (AC: 5%); see the bus post |
| 996422SAC | Long-distance road transport by bus or car | Inter-city buses, hired coaches between cities | Exempt to 18%, by type |
| 996411SAC | Local land transport | City buses, metro, autos, airport shuttles on a schedule | Exempt to 5%, by type |
When the app pays the GST
Section 9(5) of the CGST Act makes the app (the e-commerce operator) pay the GST on certain services sold through it, as if it had supplied them. For rides:
- From 1 Jul 2017: radio taxis, motorcabs, maxicabs and motorcycles.
- From 1 Jan 2022: any motor vehicle, including buses and autos. App-booked autos and non-AC buses stopped being exempt.
- From 20 Oct 2023: for buses, only where the bus operator is not a company. A bus company charges and pays its own GST.
You run ten cars. This month ₹4,00,000 of duties came from your own company customers and ₹1,50,000 of rides came through a ride-booking app. You are on the 5% option.
| Own customers | Through the app | |
|---|---|---|
| Value of trips | ₹4,00,000 | ₹1,50,000 |
| GST on your own invoices (5%) | ₹20,000 | ₹0 |
| GST paid by the app | ₹0 | Paid by the app |
Whether a subscription-only app, which charges drivers a fee and does not set or collect the fare, counts as the operator here is being argued in court. There is no circular on it yet.
Buses, autos and school runs
- AC buses, stage or contract carriage, pay 5% with no input credit.
- Non-AC route buses are exempt, and so are non-AC contract carriages except for tourism, conducted tours, charter or hire.
- Autos, e-rickshaws and metered cabs are exempt when hailed or booked offline.
- A bus rented with driver and fuel also fits the renting entry used for cab hire, with its 5% or 18% options. Our reading: the notification does not say whether that entry or the AC-bus entry above wins, so take advice before charging 18% for an AC bus.
- School transport billed to the school (pre-school to higher secondary) is exempt, and so is hiring a vehicle to the contractor who runs it.
You rent a 32-seat AC bus with driver and fuel to a manufacturer for its shift transport at ₹1,80,000 a month.
| 18% renting option (our reading) | 5%, AC bus entry | |
|---|---|---|
| Monthly rent | ₹1,80,000 | ₹1,80,000 |
| GST | ₹32,400 | ₹9,000 |
| Credit the manufacturer can usually take | ₹32,400 | ₹9,000 |
| Net cost to the manufacturer | ₹1,80,000 | ₹1,80,000 |
The block on credit for hiring vehicles covers only vehicles of up to 13 seats, so a business hiring a bigger bus for its own work can usually take the GST back either way. The difference is yours: at 18% you can claim credit on the bus, its servicing and other inputs; at 5% you cannot. Whether the 18% option is open for an AC bus is our reading, so ask your CA before using it.
Common questions
Do I charge GST on trips I get from a ride app?
Where the app is the e-commerce operator under section 9(5), no: the app pays the GST on those rides. Keep them out of your own taxable invoices and check how the app's statement shows them.
Are non-AC buses always exempt?
Non-AC route buses are exempt, and so are non-AC contract carriages except for tourism, conducted tours, charter or hire. A non-AC bus hired out for a tour or charter is taxable.
Do autos booked through an app pay GST?
Yes, from 1 January 2022, and the app pays it. Autos hailed on the street or booked offline remain exempt.
Is transport for a college exempt like school transport?
No. The exemption covers only schools, from pre-school to higher secondary, and only when the bill is to the school.
Words used on this page
- GST option (5% or 18%)
- For cab hire with driver and fuel you choose 5% with almost no input credit, or 18% with full input credit. Until 21 Sep 2025 the second option was 12%.
- ITC (input tax credit)
- GST you paid on business purchases that you subtract from the GST you collect.
- Same line of business
- Buying the same kind of service you sell, such as cab hire bought from another operator.
- RCM (reverse charge)
- The customer pays the GST to the government instead of the supplier.
- Body corporate
- A company or an LLP. Proprietors, HUFs and partnership firms are not body corporates.
- SAC / HSN
- The code printed on an invoice for a service (SAC) or for goods (HSN).
- Place of supply
- The state whose GST applies. It decides whether you charge IGST or CGST plus SGST.
- E-invoice / IRN
- Reporting an invoice to the government portal, which returns an Invoice Reference Number and a QR code.
- Pure agent
- Someone who pays an expense on the customer's behalf, with its authority, and recovers it at actual cost.
- TDS
- Tax your customer cuts from a payment to you and deposits against your PAN. You claim it in your income tax return.
- TCS
- Tax a seller collects from the buyer on top of the price, such as on overseas tour packages.