Local Taxi Under SAC Code 996423

Local taxi services under this code cover short distance passenger travel by meter taxis, radio taxis and app based cabs inside cities and nearby areas. Operators arrange vehicles and drivers so that passengers can book rides quickly for daily movement. Under GST, these local taxi transport services are classified under SAC 996423. This SAC code and its GST rate decide how GST applies on taxi bills.  This helps people move quickly for office, market, airport and daily local trips.

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996423 SAC Code GST Rate

Review old and new GST rates for Local Taxi under 996423 SAC Code.

Local taxi services under SAC 996423 are treated as passenger transport by motor cab under GST. The responsibility for charging and paying GST can depend on whether the service is arranged directly or through an aggregator platform.

After the September 2025 rationalisation, taxable passenger transport services under these codes generally fall in the 5 percent slab without input tax credit for standard transport models, while certain premium, charter or tourism oriented services can attract 18 percent with input tax credit. The exact rate and conditions depend on the latest GST notifications for each category.

The table below shows the latest standard GST rate for SAC code 996423 where the service is taxable.

SAC Code

996423

Description

Taxi services including radio taxi & other similar services

New Rate

5 %
Essential

Old Rate

5 %

Notes

Long distance taxi / contract carriage follows the same passenger transport pattern: 5% without ITC vs higher slab with ITC, with the higher slab stepped up from 12% to 18%.

When issuing invoices for taxable passenger transport services under this SAC code, operators should clearly show the fare, the GST rate and the tax amount so that passengers and corporate clients understand the charge. The same SAC code and rate should be applied in GSTR 1 and GSTR 3B for outward supplies, and exempt services should be reported correctly wherever required.

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Explore More SAC Codes Under 9964

Practical Classification Guidance

Passenger transport operators should choose the SAC code that best matches the main type of service they provide. Correct SAC selection and correct use of 5 percent or 18 percent GST slabs, along with exemption rules where applicable, help reduce disputes, maintain a clear tax trail and make GST returns easier to explain during scrutiny or audits.

Conclusion

Local taxi services under SAC 996423 cover city taxi, radio taxi and app based cab rides. Taxable services generally sit in the 5 percent slab without input tax credit, with 18 percent applying in some special configurations. Fleet owners, drivers and aggregators should understand who is liable to pay GST, apply the correct rate on every ride and maintain consistent reporting in GST returns. For new aggregator models or policy changes, it is sensible to review the latest GST circulars.

Frequently Asked Questions

Clear answers to common queries about SAC Code 996423 and GST compliance.

What does SAC code 996423 cover in GST?

SAC 996423 covers local taxi, radio taxi and similar passenger transport services. It includes point to point rides within a city, app based cab services, hourly rentals and short distance trips using cars and similar small passenger vehicles hired with a driver.

Does SAC 996423 include local taxi and radio taxi services for passengers?

Yes. Regular city taxis, radio taxis and app based cabs operated by platforms or individual owners are normally classified under SAC 996423. The service is the transport of passengers by motor vehicle on hire, usually arranged either directly or through an aggregator application.

What is the GST rate on local taxi services under SAC 996423?

Local taxi services often attract a concessional GST rate such as 5% without ITC or a higher rate like 12% with ITC, depending on the scheme chosen and aggregator rules. In some cases, the aggregator is liable to pay GST under reverse charge or special mechanisms.

Are hourly and point to point city rides billed under SAC 996423?

Yes. Whether the customer hires a cab for a fixed number of hours or for a simple pick and drop within the city, the service is usually billed with SAC 996423. The fare structure may change, but the basic classification as local taxi service remains the same.

Is ITC allowed on GST paid for SAC 996423 services?

Taxi operators using concessional rates generally cannot claim ITC on related expenses. Where a higher rate with credit is permitted and chosen, they may claim ITC on eligible inputs like repairs and insurance, but fuel related credits are still restricted under general GST input tax rules.

Important Disclaimer

The above does not constitute professional advice or a formal recommendation. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.