New GST on Transportation Services in India: Rates, HSN Codes & Applicability
Quick Summary
- The new GST rates for transportation services in India are 5% or 18%, with exemptions for essential goods and services.
- Goods Transport Agency (GTA) services have a 5% GST rate without ITC or 18% with ITC, and exemptions apply to certain consignments.
- Passenger transport services like non-AC rail and metro are exempt, while economy air travel is taxed at 5% and business class at 18%.
- HSN and SAC codes categorize services, such as 996511 for road goods transport and 996425 for passenger air transport.
- The GST system unifies tax rules across different transport modes, affecting both goods and passenger services.
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 transportation HSN code and gst rate along with the input tax credit rules , and the exemptions you should know.
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New GST Rate on Goods and Passenger Transportation in India
The Government of India has revised GST rates on transportation services effective 22 September 2025. The major change is the withdrawal of the 12% slab, with services now largely rationalised to 5% or 18%, depending on Input Tax Credit (ITC) eligibility. No compensation cess applies.
Transportation services under GST are broadly classified into:
- Transportation of Goods
- Transportation of Passengers
Below is a consolidated comparison of new and old GST rates.
GST on Goods Transportation Services
| Mode of Transport | GST Rate (After 22 Sept 2025) |
GST Rate (Before 22 Sept 2025) |
Exemptions / Notes |
|---|---|---|---|
| Goods Transport Agency (GTA) – Road | 5% (no ITC) / 18% (with ITC) | 5% / 12% | RCM applicable in specified B2B cases |
| Railways (Freight) | 5% | 5% | Limited exemptions for essential goods |
| Inland Waterways (Cargo) | 5% | 5% | Relief and essential goods exemptions |
| Air Cargo (Domestic) | 18% | 18% | Limited exemptions (relief, defence) |
| Courier Services (Private) | 18% | 18% | Govt postal services remain exempt |
Key Update
The earlier 12% option (with ITC) has been removed and replaced by an 18% slab where ITC is available. GTA operators can choose between concessional 5% without ITC or 18% with ITC under forward charge.
(After 22 Sept 2025) 5% (no ITC) / 18% (with ITC)
(Before 22 Sept 2025) 5% / 12%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 18%
(Before 22 Sept 2025) 18%
(After 22 Sept 2025) 18%
(Before 22 Sept 2025) 18%
New GST on Passenger Transportation Services
| Type of Service | GST Rate (After 22 Sept 2025) |
GST Rate (Before 22 Sept 2025) |
ITC Availability |
|---|---|---|---|
| Air Travel – Economy Class | 5% | 5% | No ITC |
| Air Travel – Business Class | 18% | 12% | ITC Available |
| AC Rail Travel (1st Class / AC Coaches) | 5% | 5% | No ITC |
| Non AC Rail / Metro | 0% (Exempt) | 0% (Exempt) | Not Applicable |
| Cab Aggregators (App Based Taxis) | 5% | 5% | No ITC |
| Renting of Vehicles with Driver | 5% (no ITC) / 18% (with ITC) | 5% / 12% | Option Based |
| Bus Services (Non AC, Government) | 0% (Exempt) | 0% (Exempt) | Not Applicable |
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 18%
(Before 22 Sept 2025) 12%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 0% (Exempt)
(Before 22 Sept 2025) 0% (Exempt)
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5% (no ITC) / 18% (with ITC)
(Before 22 Sept 2025) 5% / 12%
(After 22 Sept 2025) 0% (Exempt)
(Before 22 Sept 2025) 0% (Exempt)
HSN And SAC Code for Transportation Services
Transportation services fall under SAC 9965 for goods transport and SAC 9964 for passenger transport.
| Service Type | SAC Code | GST Rate (After 22 Sept 2025) |
GST Rate (Before 22 Sept 2025) |
|---|---|---|---|
| Road Goods Transport (GTA) | 996511 | 5% / 18% | 5% / 12% |
| Rail Freight | 996512 | 5% | 5% |
| Water Transport (Cargo) | 996521 / 996522 | 5% | 5% |
| Passenger Road Transport | 996411 | 0% / 5% | 0% / 5% |
| Passenger Air Transport | 996425 / 996426 | 5% / 18% | 5% / 12% |
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(After 22 Sept 2025) 5% / 18%
(Before 22 Sept 2025) 5% / 12%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 0% / 5%
(Before 22 Sept 2025) 0% / 5%
(After 22 Sept 2025) 5% / 18%
(Before 22 Sept 2025) 5% / 12%
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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Input Tax Credit (ITC) Rules
| Service Category | GST Rate (New) | ITC Eligibility |
|---|---|---|
| GTA at 5% | 5% | No |
| GTA at 18% | 18% | Yes |
| Passenger Air (Economy) | 5% | No |
| Passenger Air (Business) | 18% | Yes |
| Renting Vehicles at 5% | 5% | No |
| Renting Vehicles at 18% | 18% | 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 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.
