New GST on Cab Services: Aggregators vs Local Operators
- Rent a cab services under GST are taxed based on the service type and ITC option selected.
- Cab services may attract 5% GST with restricted ITC or 18% GST with full ITC, as applicable.
- Cab rides booked through app-based aggregators generally attract 5% GST, with the electronic commerce operator responsible for GST compliance under applicable provisions.
- GST on cab hire charges depends on whether the service is provided by an aggregator, local cab operator, or another service provider under the applicable GST provisions.
- Offline metered auto-rickshaw services may remain exempt, while app-based passenger transport services are taxed as per applicable GST rules.
- ITC availability on cab-related expenses depends on the GST rate option and applicable restrictions.
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.
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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
GST rates for taxable passenger transport services were revised from 22 September 2025. Applicable cab services may attract 5% GST with restricted ITC or 18% GST with full ITC, depending on the service category and ITC option.
GST on Cab Services – Aggregators vs Operators
| Cab Type | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) | Who Pays GST? |
|---|---|---|---|
| Cab via aggregator (such as Ola or Uber) | 5% | 5% | Aggregator / e-commerce operator |
| Non-AC cab via aggregator | 5% | 5% | Aggregator / e-commerce operator |
| Auto-rickshaw booked through an app | 5% | 5% (where applicable) | Aggregator / e-commerce operator |
| Taxable local cab service booked offline | 5% with restricted ITC or 18% with full ITC | 5% with restricted ITC or 12% with ITC option | Operator, if liable to pay GST |
| Rent-a-cab with driver, where fuel cost is included | 5% with restricted ITC or 18% with full ITC | 5% with restricted ITC or 12% with ITC option | Operator or recipient under RCM, as applicable |
Cab Type
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Who Pays GST?
Cab Type
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Who Pays GST?
Cab Type
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Who Pays GST?
Cab Type
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Who Pays GST?
Cab Type
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Who Pays GST?
Note: For applicable rent-a-cab services, the earlier 12% GST option with ITC was revised to 18% GST with full ITC from 22 September 2025. The 5% concessional rate with restricted ITC continues.
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GST on Rent a Cab Service in India
The GST on rent a cab service in India, where the vehicle is supplied with a driver and fuel cost is included in the consideration, is either:
- 5% with restricted ITC, or
- 18% with full ITC
This includes:
- Airport pick-ups/drop-offs
- Outstation trips
- Corporate vehicle rentals
- Event transportation
For businesses hiring vehicles, GST will be charged as applicable based on the nature of the service and GST liability.
Which Option Is Better for Operators: 5% or 18%?
- 5% GST: Lower rate with restricted ITC as per applicable GST provisions.
- 18% GST: Higher rate with full ITC, subject to normal GST conditions
Cab operators can choose the applicable rate based on their business model and ITC eligibility.
GST for Aggregators Like Ola & Uber
- Collect 5% GST from riders
- Deposit it with the government
- File regular GSTR-8 returns
- Comply with TCS rules under Section 52 of GST
Driver-partners supplying services through eligible aggregators may be exempt from GST registration subject to applicable conditions.
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 |
Purpose
ITC Allowed?
Purpose
ITC Allowed?
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ITC Allowed?
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 .
