--- title: "New GST on Taxi 2026: 5% Rate on Taxi, Cab & Ride Services" description: "New GST rate on taxi services in 2026 is 5% on metered taxis, app-based cabs and rides. Busy ensures accurate GST billing on every sale and purchase." canonical: "https://busy.in/gst-rates/taxi/" author: "Nishant" published: "2025-05-15T09:52:17.000Z" category: "GST Rates" --- - GST on taxi services in India varies based on service type and booking method, with non-AC offline taxis being exempt. - AC taxis and those booked through apps like Uber and Ola are subject to a 5% GST rate, with no Input Tax Credit (ITC) available. - Rent-a-cab services can have a GST rate of either 5% without ITC or 18% with ITC, depending on the operator's choice. - Online taxi aggregators must collect 5% GST from passengers, and drivers don't need to register for GST if they earn below ₹20 lakh annually. - Basic taxi services like non-air-conditioned and manually hired taxis are exempt from GST, meaning no extra charges for passengers. # New GST on Taxi Services: Applicability and Rate Breakdown If you’ve ever taken a cab or run a taxi business, you’ve probably wondered how GST affects the fare. This guide breaks down everything about **GST on taxi services**—when it applies, what the rates are, and how it affects both passengers and service providers. ## What is the GST on Taxi Services? The [GST system](https://busy.in/gst/) in India applies to most transportation services, and yes, that includes taxis. But the rate depends on how the service is offered and whether it’s booked through an online platform or offline. ## New GST Rate on Taxi Services in India The Government of India is updating GST rates effective after **22 Sep 2025**. Below are the **expected new GST rates** for taxi and related passenger transport services (no compensation cess). ## New GST Rate on Taxi Services | Service Type | New GST Rate | Input Tax Credit (ITC) | | --- | --- | --- | | Taxi service (offline operator, non-AC) | Exempt (0%) | No | | Taxi service (AC or radio taxi, offline) | 5% | No | | Taxi booked through online platforms (Uber, Ola) | 5% | No | | Rent-a-cab service (with operator) | 5% or 18%\* | 5% without ITC / 18% with ITC | ## Old GST Rate on Taxi Services (Old GST Rates – Applicable Until 21st September) | Service Type | GST Rate | Input Tax Credit (ITC) | | --- | --- | --- | | Taxi service (offline operator, non-AC) | Exempt (0%) | No | | Taxi service (AC or radio taxi, offline) | 5% | No | | Taxi booked through online platforms (Uber, Ola) | 5% | No | | Rent-a-cab service (with operator) | 5% or 12%\* | 5% without ITC / 12% with ITC | **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) Live Demo Available Today ## Access Taxi Fleet Billing and Collections on Mobile Trusted by 6,00,000+ Users 4.6 Google Rating ## What is the GST Rate on Taxi Bookings from Aggregators? Online taxi aggregators like Uber and Ola are now required to collect GST from passengers. This rule ensures that digital platforms are treated like traditional operators under GST. - **GST on taxi services** through these apps is 5% - Passengers see the GST added to their final fare - Drivers do not need to register for GST if their annual turnover is below ₹20 lakh **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) ## GST Compliance for Taxi Operators - If you choose 5% GST, you can’t [claim Input Tax Credit](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) . - If you opt for 12%, you can claim ITC on vehicles, fuel, maintenance, etc. - If you offer services to aggregators (like Uber/Ola), they’ll handle GST collection, but you still need to maintain records. **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## When Taxi Services Are Exempt from GST Some basic taxi services are exempt under GST. These include: - Non-air-conditioned taxis - Manually hired taxis not booked through apps - Services provided by individuals below the [GST threshold](https://busy.in/gst/gst-registration-certificate-everything-you-need-to-know/) In such cases, the **GST rate on taxi** is 0%, which means passengers don’t pay any GST at all. ## Impact on Consumers and Drivers - **For Consumers:** Expect 5% GST on most app-based rides. Offline, non-AC rides may be cheaper due to exemption. - **For Drivers:** Small operators can avoid registration if below threshold. Those working with aggregators are auto-covered under GST even without their own registration. Whether you’re a rider or a taxi owner, knowing the **GST rate on taxi services** ensures you’re not overcharged and helps taxi businesses stay compliant. ## About the author **Nishant** I am a Chartered Accountant with more than five years of experience in the accounting field. My areas of expertise include GST, income tax, and audits. I am passionate about sharing knowledge through blogs and articles, as I believe that learning is a lifelong journey. My goal is to provide valuable insights and simplify financial matters for individuals and business owners alike. ## Frequently asked questions ### What is the GST rate on taxi services? Taxi **GST rate is 5%** for most online and AC-based bookings. Non-AC taxis may be exempt. ### Is GST applicable on Ola and Uber rides? Yes, **GST on taxi services** booked via apps like Ola or Uber is **5%**. ### Can taxi operators claim Input Tax Credit? Only if they opt for the **12% GST rate**. The 5% option doesn't allow ITC. ### Are there any exemptions for GST on taxi? Yes, **non-AC taxis** and small operators earning below ₹20 lakh per year are exempt. ### Does the passenger need to pay GST separately? No, **GST is included in the fare** and handled by the operator or aggregator. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)