New GST on Cab Services: Aggregators vs Local Operators
With the rise of app-based platforms and local travel agencies, cab services have become more accessible than ever. But whether you’re booking a ride through Uber or hiring a cab for an outstation trip, GST is likely part of your bill. This guide explains the gst on cab service, the tax structure for aggregators and independent operators, and how it affects your ride fare.
GST on Cab Services: Who Charges It?
Cab services are classified under passenger transportation services and attract GST based on how the ride is booked and who provides it:
- Aggregator-based services (e.g., Uber, Ola)
- Local/rental cab operators (offline agencies or direct hires)
Each has different rules under the GST system.
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New GST Rate on Cab Services in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for cab and related passenger transport services (no compensation cess).
Cab Service New GST Rate – Aggregators vs Operators
| Cab Type | New GST Rate | Who Pays GST? |
|---|---|---|
| AC cab via aggregator (Ola, Uber) | 5% | Aggregator |
| Non-AC cab via aggregator | 5% | Aggregator |
| Auto-rickshaw via app | 0% (Exempt) | None |
| Local cab booked offline (AC/Non-AC) | 5% or 18% | Operator (if registered) |
| Rent-a-cab (with driver) | 5% or 18% | Operator |
Cab Service Old GST Rate – Aggregators vs Operators
(Old GST Rates – Applicable Until 21st September)
| Cab Type | GST Rate | Who Pays GST? |
|---|---|---|
| AC cab via aggregator (Ola, Uber) | 5% | Aggregator |
| Non-AC cab via aggregator | 5% | Aggregator |
| Auto-rickshaw via app | 0% (Exempt) | None |
| Local cab booked offline (AC/Non-AC) | 5% or 12% | Operator (if registered) |
| Rent-a-cab (with driver) | 5% or 12% | Operator |
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GST on Rent a Cab Service in India
The gst on rent a cab service in india is either:
- 5% without ITC, or
- 12% with ITC
This applies to services where a vehicle is rented with a driver. This includes:
- Airport pick-ups/drop-offs
- Outstation trips
- Corporate vehicle rentals
- Event transportation
For businesses hiring vehicles, GST will be added if the provider is registered.
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Which Option Is Better for Operators: 5% or 12%?
- 5% GST: Lower rate but no Input Tax Credit
- 12% GST: Higher rate but eligible for ITC on fuel, vehicle maintenance, and leasing costs
Cab operators choose the rate based on their business model and ITC eligibility.
GST for Aggregators Like Ola & Uber
- Collect 5% GST from riders
- Deposit with the government
- File regular GSTR-8 returns
- Comply with TCS rules under Section 52 of GST
Driver-partners are not required to register under GST if working solely through aggregators.
Input Tax Credit (ITC) for Businesses Using Cabs
| Purpose | ITC Allowed? |
|---|---|
| Cabs for employee pick-up/drop | No |
| Cabs hired for official client travel | Yes |
| Cabs used for resale or further supply | Yes |
Conclusion
Understanding the gst on cab service is essential whether you’re running a fleet, hiring a cab for business, or just booking a ride. It helps with pricing clarity, tax planning, and accurate GST compliance .
I am a Fellow Chartered Accountant (FCA) and LLB graduate with 10 years of experience in corporate auditing, taxation, and financial consulting. My expertise includes corporate audits, income tax planning, HSN code classification, and GST rate advisory. Through my blogs and articles, I aim to simplify corporate taxation, auditing, and GST compliance, making financial matters more accessible for professionals and business owners.
Frequently Asked Questions
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What is the cab service GST rate in India?It's usually 5% without ITC or 12% with ITC, depending on the provider's choice.
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Is there GST on rent a cab service?Yes. The GST on rent a cab service is 5% or 12%, based on how the service is invoiced.
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Do Ola and Uber charge GST?Yes. They collect 5% GST and include it in your fare summary.
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Can I claim GST Input Tax Credit on cab bills?Yes, if you're using the cab for business and the invoice is under the company's GST number, and the rate charged is 12%.
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Is GST charged on auto rides booked through apps?No. App-based auto services are exempt from GST.