--- title: "New GST Rate for Transportation 2026: 5% Rate on Transport" description: "New GST rate on transportation in 2026 is 5% on road transport of goods and passenger services. Apply the correct GST rate automatically with Busy on every invo" canonical: "https://busy.in/gst-rates/transportation/" author: "Hitesh Aggarwal" published: "2025-04-24T08:30:57.000Z" category: "GST Rates" --- - 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. # New 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 transportation HSN code and gst rate along with the [**input tax credit rules**](https://busy.in/gst/complete-guide-to-input-tax-credit-under-gst-in-india/) , and the exemptions you should know. ## **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. ## 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 | ## 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% | **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) Live Demo Available Today ## Register Fleet Vehicles as Fixed Assets for Depreciation Trusted by 6,00,000+ Users 4.6 Google Rating ## Types of Transportation Services Under GST Transportation services under GST are classified into two broad categories: 1. **Transportation of Goods** 2. **Transportation of Passengers** Each category has its own tax rules, rates, and exemptions depending on the mode of transport (road, rail, air, sea). **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## 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)](https://busy.in/gst/input-tax-credit/) option must be applied consistently. **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## **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**](https://busy.in/hsn/) - ITC available if services are used for business ## **Final Thoughts** Understanding [**GST**](https://busy.in/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. ## About the author **Hitesh Aggarwal** As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience. ## Frequently asked questions ### What is the GST rate on road transport of goods? Goods Transport Agency (GTA) services by road are taxed at **5% without Input Tax Credit (ITC)** or **18% with ITC** under the forward charge mechanism. Reverse Charge Mechanism (RCM) may apply in specified B2B cases where the recipient is liable to pay GST. ### Is rail transport of goods taxable under GST? Yes. Rail freight is taxable at **5% GST**. Certain essential goods and relief materials may qualify for exemptions as notified by the government. ### Can businesses claim ITC on cab rides booked for business purposes? Generally, **no.** Cab services taxed at **5% GST do not allow ITC**. Additionally, ITC on passenger transport services is restricted under GST law unless specific conditions are met. ### Is metro travel subject to GST? No. Metro services and non AC public transport such as government operated non AC buses remain **fully exempt from GST.** ### Can logistics companies opt to claim ITC? Yes. Logistics companies, including GTA operators, can opt for the **18% GST slab with ITC** instead of the concessional 5% rate without ITC. Once selected, the chosen tax structure must be applied consistently as per GST provisions. ## 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/)