Vehicle Rental Services Under SAC Code 996601
Vehicle rental services cover renting cars, vans, buses, trucks and coaches to customers for self drive or with driver for a fixed period or distance. Operators provide vehicles, maintenance and basic support while customers use them for personal, business or logistics needs. Under GST, these vehicle rental services are classified under SAC 996601. This SAC code and its GST rate decide how GST is charged on rental invoices.
Vehicle Rental Services GST Rate for SAC Code 996601
Vehicle rental services under SAC 996601 are treated as rental services of transport vehicles under GST. Earlier, different tax treatments under service tax and VAT made it difficult to compare effective tax costs for rental versus own vehicles.
After the September 2025 rationalisation, most vehicle, boat and aircraft rental services under these codes generally fall in the 18 percent slab with input tax credit, as they are input intensive business services. In limited passenger transport linked cases, other specific treatments may apply based on the latest notifications.
The table below shows the latest standard GST rate for SAC code 996601 for typical rental services.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 996601 | Rental services of road vehicles including buses, coaches, cars, trucks and other motor vehicles, with or without operator | 5% without ITC / 12% with ITC / 18% with ITC | 5% without ITC / 18% with ITC | The 56th Council explicitly rationalises “renting of motor vehicles (where fuel cost is included)” and “renting of goods carriages”: concessional 5% without ITC continues, while the 12% full-ITC option shifts to 18% with ITC. Use 18% with ITC as the default for full credit scenarios under this SAC. |
When issuing rental invoices under this SAC code, service providers should clearly show the rental amount, the applicable GST rate and tax value so that business customers can account for the expense and input tax credit correctly. The same SAC code and rate should then be reflected in GSTR 1 and GSTR 3B for outward supplies to keep GST records clear and consistent.
Explore Other SAC Codes Under 9966
This SAC code is part of the rental and support services to transportation group 9966, which covers renting of vehicles, vessels and aircraft, cargo handling, storage and other allied support services. The six digit codes under this group help separate pure rental, warehousing and operational support for GST reporting.
The list below highlights key six-digit SAC codes under 9966
Service providers should choose the SAC code that best represents whether they are renting transport assets, handling cargo or providing warehousing and support. Correct SAC selection and GST rate application help businesses claim input tax credit properly and make GST returns easier to explain during audits or departmental checks.
Conclusion
Vehicle rental services under SAC 996601 cover renting cars, buses, trucks and coaches for self drive or with driver. These services are typically taxed at 18 percent with input tax credit, as they support business travel and logistics. Rental operators and corporate users should structure agreements properly, apply the correct GST rate on rental bills and maintain clear documentation in GST returns. For long term lease like models or mixed use, it is sensible to study the latest GST guidance and seek expert advice.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.
Frequently Asked Questions
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What does SAC code 996601 cover in GST?
SAC 996601 covers rental services of road vehicles like cars, buses, trucks and coaches, with or without drivers, when the main supply is giving vehicles on rent or lease, not just simple passenger transport. It applies to self drive rentals and long term vehicle hire arrangements.
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Does SAC 996601 include car, bus, truck and coach rental services?
Yes. Renting cars for self drive, hiring buses with drivers for regular staff movement and leasing trucks for logistics operations can all fall under SAC 996601. The key feature is that the customer gets control or use of the vehicle for a period, not individual tickets.
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What is the GST rate on vehicle rental services under SAC 996601?
Vehicle rental services are usually taxed at standard GST rates, commonly 18%, though some passenger vehicle rentals with specified conditions may have concessional rates. The rate can also differ when fuel is included or excluded. Providers must check the relevant notifications for their exact rental structure.
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Should self drive and chauffeur driven rentals both use SAC 996601?
Yes. Both self drive rentals and rentals with driver are typically classified under SAC 996601 when they involve renting the vehicle for hours, days or months. Only when the service resembles regular passenger transport by tickets or fixed routes might other transport SAC codes apply instead.
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Is ITC available on GST paid for SAC 996601 services for businesses?
ITC on motor vehicle related services is restricted in many cases. Businesses may claim ITC when vehicles are used for further supply of such services, training, or transport of goods, but not usually for employee transport. Rules are complex, so ITC eligibility must be checked carefully case by case.