New GST on Transportation Services in India: Rates, HSN Codes & Applicability

Updated: Jun 3, 2026 12 min read Hitesh Aggarwal
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

Goods Transport Agency (GTA) – Road

GST Rate
(After 22 Sept 2025)

5% (no ITC) / 18% (with ITC)

GST Rate
(Before 22 Sept 2025)

5% / 12%

Exemptions / Notes

RCM applicable in specified B2B cases

Mode of Transport

Railways (Freight)

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

Exemptions / Notes

Limited exemptions for essential goods

Mode of Transport

Inland Waterways (Cargo)

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

Exemptions / Notes

Relief and essential goods exemptions

Mode of Transport

Air Cargo (Domestic)

GST Rate
(After 22 Sept 2025)

18%

GST Rate
(Before 22 Sept 2025)

18%

Exemptions / Notes

Limited exemptions (relief, defence)

Mode of Transport

Courier Services (Private)

GST Rate
(After 22 Sept 2025)

18%

GST Rate
(Before 22 Sept 2025)

18%

Exemptions / Notes

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

Air Travel – Economy Class

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

ITC Availability

No ITC

Type of Service

Air Travel – Business Class

GST Rate
(After 22 Sept 2025)

18%

GST Rate
(Before 22 Sept 2025)

12%

ITC Availability

ITC Available

Type of Service

AC Rail Travel (1st Class / AC Coaches)

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

ITC Availability

No ITC

Type of Service

Non AC Rail / Metro

GST Rate
(After 22 Sept 2025)

0% (Exempt)

GST Rate
(Before 22 Sept 2025)

0% (Exempt)

ITC Availability

Not Applicable

Type of Service

Cab Aggregators (App Based Taxis)

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

ITC Availability

No ITC

Type of Service

Renting of Vehicles with Driver

GST Rate
(After 22 Sept 2025)

5% (no ITC) / 18% (with ITC)

GST Rate
(Before 22 Sept 2025)

5% / 12%

ITC Availability

Option Based

Type of Service

Bus Services (Non AC, Government)

GST Rate
(After 22 Sept 2025)

0% (Exempt)

GST Rate
(Before 22 Sept 2025)

0% (Exempt)

ITC Availability

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

Road Goods Transport (GTA)

SAC Code

996511

GST Rate
(After 22 Sept 2025)

5% / 18%

GST Rate
(Before 22 Sept 2025)

5% / 12%

Service Type

Rail Freight

SAC Code

996512

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

Service Type

Water Transport (Cargo)

SAC Code

996521 / 996522

GST Rate
(After 22 Sept 2025)

5%

GST Rate
(Before 22 Sept 2025)

5%

Service Type

Passenger Road Transport

SAC Code

996411

GST Rate
(After 22 Sept 2025)

0% / 5%

GST Rate
(Before 22 Sept 2025)

0% / 5%

Service Type

Passenger Air Transport

SAC Code

996425 / 996426

GST Rate
(After 22 Sept 2025)

5% / 18%

GST Rate
(Before 22 Sept 2025)

5% / 12%

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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).

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Input Tax Credit (ITC) Rules

Service Category

GTA at 5%

GST Rate (New)

5%

ITC Eligibility

No

Service Category

GTA at 18%

GST Rate (New)

18%

ITC Eligibility

Yes

Service Category

Passenger Air (Economy)

GST Rate (New)

5%

ITC Eligibility

No

Service Category

Passenger Air (Business)

GST Rate (New)

18%

ITC Eligibility

Yes

Service Category

Renting Vehicles at 5%

GST Rate (New)

5%

ITC Eligibility

No

Service Category

Renting Vehicles at 18%

GST Rate (New)

18%

ITC Eligibility

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.

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Check GST Rates, HSN & SAC Codes

Frequently Asked Questions

Clear answers to common queries about this topic.

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.
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Hitesh Aggarwal

Chartered Accountant

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.

MRN: 529770 Delhi
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