GST Rate for Car, Bike and Vehicle Rental Services

The GST rate for all services and goods have been notified by the GST Council. GST rate for services fall under the 0%, 5%, 12%, 18% or 28% slabs. Further, GST registration is now mandatory for all persons who are classified as a taxable person under GST. Since car or vehicle rental services often involve the inter-state supply of services,

GST registration would be mandatory for the majority of entities involved in car or vehicle rental services. In this article, we look at the GST rate for car, bike and vehicle rental services.

SAC Code for Car Rental Services

996601 is the SAC code for r

ental services of road vehicles including buses, coaches, cars, trucks and other motor vehicles, with or without an operator. SAC code for Water Vehicles Rental Services

996602 is the SAC code for rental services of water vessels including passenger vessels, freight vessels etc. with or without an operator.

996603 is the SAC code for rental services of aircraft including passenger aircraft, freight aircraft, etc., with or without an operator. Finally, 996609 is the SAC code for rental services of other transport vehicles, with or without an operator. Vehicle rental services are taxed differently under GST from

passenger transport services. Hence, it is important for those involved in passenger transport or vehicle rental services or travel agent services to know about all three categories and classify the services provided by them correctly.

GST Rate for Car or Vehicle Rental Services

18% GST is applicable on renting of the motor cab if fuel cost is borne by the service recipient. Further, leasing of aircraft by scheduled airlines for scheduled operations is taxed at 5% GST rate with input tax credit allowed for input services. Services by way of giving on hire the following are exempt from GST:

To a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
To a goods transport agency, a means of transportation of goods;

1 for all services and goods.

Back to Learn

Frequently Asked Questions

Common questions about GST Rate for Vehicle Rental Services.

The GST rate for renting a car or other motor vehicle is 18% if the fuel cost is borne by the service recipient. This rate applies to the rental services of road vehicles like buses, coaches, cars, trucks, and other motor vehicles, with or without an operator, under the SAC code 996601.

Yes, leasing of aircraft by scheduled airlines for scheduled operations attracts GST. However, it is taxed at a lower rate of 5% with input tax credit allowed for input services.

Yes, there are two types of vehicle rental services that are exempt from GST: 1) Giving a motor vehicle meant to carry more than twelve passengers on hire to a state transport undertaking, and 2) Giving a means of transportation of goods on hire to a goods transport agency.

The SAC code for rental services of water vessels, including passenger vessels and freight vessels, with or without an operator, is 996602.

Yes, since car or vehicle rental services often involve the inter-state supply of services, GST registration is mandatory for the majority of entities involved in car or vehicle rental services.

Vehicle rental services and passenger transport services are taxed differently under GST. Therefore, it is essential for those involved in these services or travel agent services to classify the services provided by them correctly.

The SAC code for rental services of aircraft, including passenger aircraft and freight aircraft, with or without an operator, is 996603.

Yes, the SAC code 996609 is for rental services of other transport vehicles, with or without an operator, not covered under the specific codes for road vehicles, water vessels, and aircraft.

Yes, the GST rates for rental services can vary depending on the type of vehicle being rented. For instance, the standard rate of 18% applies to rental services of road vehicles, while leasing of aircraft by scheduled airlines for scheduled operations is taxed at a lower rate of 5%.

No, the GST rate for car or vehicle rental services remains the same, whether an operator is provided or not. The SAC codes for these services cover both scenarios, with or without an operator.