Boat Rental Under SAC Code 996602

Boat rental services cover renting boats, ferries and other water vessels for passenger or cargo use on rivers, lakes and coastal waters. Operators provide the vessel with or without crew for fixed routes, events or projects. Under GST, such water vessel rental and charter services are classified under SAC 996602. This SAC code and its GST rate decide how GST applies on boat rental bills.  This helps operators support tourism, events and project work on water routes.

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996602 SAC Code GST Rate

Review old and new GST rates for Boat Rental under 996602 SAC Code.

Boat rental services under SAC 996602 are treated as rental services of water vessels under GST. The taxability can vary based on whether the rental is for transport, tourism, events or project work.

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 996602 for typical rental services.

SAC Code

996602

Description

Rental services of water vessels including passenger vessels, freight vessels etc with or without operator

New Rate

18% with ITC

Old Rate

18% with ITC

Notes

Renting a vessel with an operator is 18%, but time charter of a vessel for transport of goods is 5%; renting a vessel without an operator is taxed at the vessel's own rate. Source: Notification 11/2017-Central Tax (Rate), S. No. 10(ii),(iii) and 17(viia).

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.

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Practical Classification Guidance

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

Boat rental services under SAC 996602 cover renting boats and other water vessels for passenger or cargo use, tourism and events. These services generally fall in the 18 percent GST slab with input tax credit for business users, though some specific transport linked cases may have different treatment. Operators should identify the main purpose of each rental, apply the appropriate GST rate on invoices and keep the same classification in GST returns. For large project and offshore work, it is wise to review the latest GST notifications and consult a tax professional.

Frequently Asked Questions

Clear answers to common queries about SAC Code 996602 and GST compliance.

What is SAC code 996602 in GST for boat rental services?

SAC 996602 covers rental services of boats, ships, ferries and other vessels, generally with crew, when the main supply is hiring the vessel for use, not just selling tickets. It applies to chartering vessels for transport, events, coastal trips or cargo movements under rental arrangements.

Does SAC 996602 cover vessel and ferry charter services with crew?

Yes. Chartering a ferry, yacht, barge or small ship with crew for a fixed period normally falls under SAC 996602. The client gets use of the vessel for their own operations or events, while the owner provides crew and navigation, and charges a rental or charter fee.

What GST rate applies to boat rental services under SAC 996602?

Boat and vessel rentals are generally taxable at the standard GST rate, commonly 18%, unless a specific concessional entry applies for particular passenger or cargo uses. The rate is charged on the rental or charter fee agreed between vessel owner and customer in the contract.

Are leisure cruises and private boat parties billed under SAC 996602?

Yes, when a full boat or yacht is rented for a private party or leisure cruise, invoices can use SAC 996602. If the service is instead sold as individual cruise tickets, passenger transport or sightseeing codes may be considered. Classification depends on whether the vessel is hired or ticketed.

Can operators claim ITC on GST paid for SAC 996602 services?

Operators providing taxable boat rentals can claim ITC on eligible inputs like repairs, maintenance, port charges and supplies used for rental operations. Customers using the rentals for business activities can also usually claim ITC, provided the rentals relate to taxable business outputs and credit is not specifically blocked.

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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.