New GST on Taxi Services: Applicability and Rate Breakdown
- GST on taxi services depends on the type of service and how the taxi is booked.
- Taxable taxi and cab services generally attract 5% GST with restricted ITC or 18% GST with full ITC.
- Metered cabs and qualifying non-AC contract carriage services are exempt from GST, subject to conditions.
- This exemption does not apply when specified passenger transport services are supplied through a notified e-commerce operator.
- For such app-based taxi services, the e-commerce operator is liable to pay GST under Section 9(5).
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.
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What is the GST on Taxi Services?
The GST system 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
GST rates for passenger transport services were revised from 22 September 2025. The 5% concessional rate continues for taxable passenger transport by motor vehicle, while the full-ITC option increased from 12% to 18%. Certain qualifying taxi services remain exempt from GST.
New GST Rate on Taxi Services
| Service Type | GST Rate From 22 Sep 2025 | GST Rate Before 22 Sep 2025 | Input Tax Credit (ITC) |
|---|---|---|---|
| Metered cab service, other than through a notified e-commerce operator | Exempt | Exempt | Not applicable |
| Qualifying non-AC contract carriage, other than radio taxi | Exempt | Exempt | Not applicable |
| Taxable taxi/cab passenger transport where fuel cost is included | 5% or 18% | 5% or 12% | 5% with restricted ITC for eligible same-line input services; 18% with full ITC |
| Taxi booked through an e-commerce operator, such as Uber or Ola | 5% | 5% | ECO must pay the Section 9(5) GST liability in cash; ITC cannot be used to discharge this liability |
| Rent-a-cab with operator where fuel cost is included | 5% or 18% | 5% or 12% | 5% with restricted ITC for eligible same-line input services; 18% with full ITC |
Service Type
GST Rate From 22 Sep 2025
GST Rate Before 22 Sep 2025
Input Tax Credit (ITC)
Service Type
GST Rate From 22 Sep 2025
GST Rate Before 22 Sep 2025
Input Tax Credit (ITC)
Service Type
GST Rate From 22 Sep 2025
GST Rate Before 22 Sep 2025
Input Tax Credit (ITC)
Service Type
GST Rate From 22 Sep 2025
GST Rate Before 22 Sep 2025
Input Tax Credit (ITC)
Service Type
GST Rate From 22 Sep 2025
GST Rate Before 22 Sep 2025
Input Tax Credit (ITC)
Note: The exemption for non-AC contract carriage applies subject to prescribed conditions and excludes services such as tourism, conducted tours, charter or hire.
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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
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GST Compliance for Taxi Operators
- Under the 5% rate, ITC is restricted to eligible input services in the same line of business.
- From 22 September 2025, the alternative rate is 18% with full ITC, subject to normal ITC eligibility conditions.
- For notified taxi services supplied through aggregators such as Uber or Ola, the e-commerce operator pays GST under Section 9(5), while operators should maintain applicable business records.
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When Taxi Services Are Exempt from GST
Certain passenger transport services are exempt from GST. These include:
- Metered cab services
- Qualifying non-air-conditioned contract carriage services, other than radio taxis
- Such non-AC contract carriage services excluding tourism, conducted tours, charter or hire
These services are exempt from GST, subject to the prescribed conditions. The exemption generally does not apply when specified passenger transport services are supplied through a notified e-commerce operator.
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.
