New GST on Cab Services: Aggregators vs Local Operators
- Cab rides booked through app-based aggregators generally attract 5% GST, with the electronic commerce operator responsible for paying GST under the applicable provisions.
- Auto-rickshaw rides booked through an app or electronic commerce operator are not GST-exempt and generally attract 5% GST. Offline auto-rickshaw and metered cab services continue to be exempt, subject to the applicable conditions.
- Taxable cab services booked directly from local operators can generally be taxed at 5% with restricted ITC or 18% with full ITC, as applicable.
- Rent-a-cab services with a driver, where fuel cost is included, can be taxed at 5% with restricted ITC or 18% with full ITC. The earlier 12% with ITC option was replaced by 18% from 22 September 2025.
- ITC availability on cab-related expenses depends on the applicable GST rate and the restrictions under GST law.
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 passenger transport services were revised from 22 September 2025. Taxable passenger transport by motor vehicle generally has the option of 5% with restricted ITC or 18% with full ITC.
GST on Cab Services – Aggregators vs Operators
| Cab Type | Current GST Rate | Who Pays GST? |
|---|---|---|
| Cab via aggregator (such as Ola or Uber) | 5% | Aggregator / e-commerce operator |
| Non-AC cab via aggregator | 5% | Aggregator / e-commerce operator |
| Auto-rickshaw booked through an app | 5% | Aggregator / e-commerce operator |
| Taxable local cab service booked offline | 5% with restricted ITC or 18% with full ITC | 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 | Operator or recipient under RCM, as applicable |
Cab Type
Current GST Rate
Who Pays GST?
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Current GST Rate
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Current GST Rate
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Current GST Rate
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Note: The earlier 12% with full ITC option was replaced by 18% with full ITC from 22 September 2025. The 5% concessional rate continues with restricted ITC.
Cab Service Old GST Rate – Aggregators vs Operators
(Old GST Rates – Applicable Until 21 September 2025)
| Cab Type | GST Rate | Who Pays GST? |
|---|---|---|
| AC cab via aggregator (Ola, Uber) | 5% | Aggregator / e-commerce operator |
| Non-AC cab via aggregator | 5% | Aggregator / e-commerce operator |
| Auto-rickshaw via app | 5% | Aggregator / e-commerce operator |
| Taxable local cab service booked offline | 5% with restricted ITC or 12% with full ITC | Operator, if liable to pay GST |
| Rent-a-cab with driver, where fuel cost is included | 5% with restricted ITC or 12% with full ITC | Operator or recipient under RCM, as applicable |
Cab Type
GST Rate
Who Pays GST?
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GST Rate
Who Pays GST?
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GST Rate
Who Pays GST?
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GST Rate
Who Pays GST?
Cab Type
GST Rate
Who Pays GST?
Note: From 22 September 2025, the 12% with full ITC option was replaced by 18% with full ITC. The 5% rate continues with restricted ITC.
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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, generally limited to eligible input services in the same line of business
- 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 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 |
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ITC Allowed?
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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 .
