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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.
Transportation services under GST are classified into two broad categories:
Each category has its own tax rules, rates, and exemptions depending on the mode of transport (road, rail, air, sea).
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| 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 |
GTA services can choose either:
Reverse Charge Mechanism (RCM) also applies in certain B2B cases, where the recipient (business) is liable to pay GST.
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| 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 |
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% |
| 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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These exemptions are aimed at reducing the cost burden on essential services and public utilities.
E-commerce and logistics providers (like Delhivery, Bluedart, Shiprocket):
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.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.