GST on Transportation Services in India: Rates, HSN Codes & Applicability
Transportation is the backbone of any economy—moving goods across states or commuting people within cities. With the implementation of the Goods and Services Tax (GST), various modes of transport now fall under unified tax rules. In this blog, we’ll explain the GST rates for transportation services in India, applicable HSN codes, input tax credit rules, and exemptions you should know.
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Types of Transportation Services Under GST
Transportation services under GST are classified into two broad categories:
- Transportation of Goods
- Transportation of Passengers
Each category has its own tax rules, rates, and exemptions depending on the mode of transport (road, rail, air, sea).
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GST on Goods Transportation Services
| Mode of Transport | GST Rate | Exemptions Available? |
|---|---|---|
| Goods Transport Agency (GTA) – Road | 5% or 12% | Yes (conditional) |
| Railways (freight) | 5% | Yes (on essential goods) |
| Inland waterways | 5% | Yes (on essential goods) |
| Air cargo (domestic) | 18% | Limited exemptions |
| Courier Services | 18% | No |
Goods Transport Agency (GTA)
GTA services can choose either:
- 5% GST without Input Tax Credit (ITC)
- 12% GST with full ITC
Reverse Charge Mechanism (RCM) also applies in certain B2B cases, where the recipient (business) is liable to pay GST.
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GST on Passenger Transportation Services
| Type of Service | GST Rate | Remarks |
|---|---|---|
| Air travel – Economy class | 5% | No ITC |
| Air travel – Business class | 12% | ITC available |
| AC Rail travel (1st class) | 5% | No ITC |
| Non-AC Rail / Metro | 0% | Exempt |
| Cab Aggregators (e.g., Uber) | 5% | No ITC |
| Renting vehicles with driver | 5% / 12% | Optional ITC rules apply |
| Bus services (non-AC, govt.) | 0% | Fully Exempt |
HSN Codes for Transportation Services
Transportation services fall under HSN Code 9965 for goods and HSN Code 9964 for passengers.
| Service Type | HSN Code | GST Rate |
|---|---|---|
| Road goods transport (GTA) | 996511 | 5% / 12% |
| Rail freight | 996521 | 5% |
| Passenger road transport | 996411 | 0% / 5% |
| Air passenger transport | 996422 | 5% / 12% |
| Water transport (cargo) | 996521 | 5% |
Input Tax Credit (ITC) Rules
| Service Category | ITC Eligibility |
|---|---|
| Goods transport (12%) | Yes |
| Passenger air (12%) | Yes |
| Passenger air (5%) | No |
| GTA @5% | No |
| GTA @12% | Yes |
Businesses must choose the correct tax rate based on whether they want to avail ITC or not. Once selected, the rate and Input Tax Credit (ITC) option must be applied consistently.
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Exemptions Under GST for Transport
- Transport of agricultural produce by road
- Transport of milk, salt, food grains by GTA
- Transport by non-AC buses, public transport
- Rail transport of specific essential goods (like fertilizers, food items)
- Passenger transport by local trains and metros
These exemptions are aimed at reducing the cost burden on essential services and public utilities.
GST on E-commerce Transport & Delivery
E-commerce and logistics providers (like Delhivery, Bluedart, Shiprocket):
- Attract 18% GST for courier/logistics services
- Must issue tax invoices with HSN codes
- ITC available if services are used for business
Final Thoughts
Understanding GST (Goods and Services Tax) on transportation services is vital for both businesses and consumers. While many public and essential transport services are exempt, commercial services like air travel and goods logistics do attract GST. Whether you’re managing a supply chain or just booking a cab, knowing the tax structure helps in better planning and cost control.
I am a Chartered Accountant with over 20 years of experience and a finance content writer. I focus on educating people about finance and taxation. I have written many blog posts on finance, taxation, trading, and investment on the BUSY website. My goal is to increase financial understanding by making complex concepts easier to grasp and to support educational programs in India.
Frequently Asked Questions
- What is the GST rate on road transport of goods?5% without ITC or 12% with ITC for GTA services.
- Is rail transport of goods taxable under GST?Yes, at 5%. Some essential items are exempt.
- Can I claim ITC on cab rides booked for business?No, cab services at 5% GST do not allow ITC.
- Is metro travel subject to GST?No. Metro and public transport by non-AC buses are GST-exempt.
- Can logistics companies opt for ITC?Yes, if they choose the 12% GST slab instead of 5%.
