Aircraft Rental Under SAC Code 996603

Aircraft rental services cover renting passenger or freight aircraft with or without crew for specific routes, time periods or projects. Operators and leasing companies provide aircraft capacity to airlines, corporates or cargo operators under lease or charter agreements. Under GST, these aircraft rental and charter services are classified under SAC 996603. This SAC code and its GST rate decide how GST is charged on aircraft rental charges.

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996603 SAC Code GST Rate

Review old and new GST rates for Aircraft Rental under 996603 SAC Code.

Aircraft rental services under SAC 996603 are treated as rental services of aircraft under GST. High value rentals often involve complex arrangements between lessors, airlines and corporate users.

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 996603 for typical rental services.

SAC Code

996603

Description

Rental services of aircraft including passenger aircrafts, freight aircrafts etc with or without operator

New Rate

18% with ITC

Old Rate

18% with ITC

Notes

Renting an aircraft with an operator is 18%; leasing an aircraft without an operator is taxed at the aircraft's own rate (5% ordinarily, 40% for aircraft for personal use). Source: Notification 11/2017-Central Tax (Rate), S. No. 10(iii) and 17(viia); Notification 09/2025-Central Tax (Rate).

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

Aircraft rental services under SAC 996603 cover renting aircraft with or without crew for passenger or cargo use. These high value services are usually taxed at 18 percent with input tax credit for eligible business users. Lessors, airlines and corporate users should frame contracts clearly, apply the proper GST rate on rental or lease bills and maintain detailed records in GST returns. For cross border leasing and complex finance structures, it is essential to follow the latest GST guidance and take expert advice.

Frequently Asked Questions

Clear answers to common queries about SAC Code 996603 and GST compliance.

What does SAC code 996603 cover in GST?

SAC 996603 covers rental and leasing services of aircraft, including passenger and freight planes or helicopters, with or without crew, when the main supply is making the aircraft available to a customer for use. It is used for aviation leasing, charter style rentals and long term hire.

Does SAC 996603 include rental of passenger or freight aircraft with or without operator?

Yes. Dry leases (without crew) and wet leases (with crew) of aircraft are both classified under SAC 996603. Airlines, charter operators and businesses may lease aircraft under this code when they obtain control of the aircraft’s use for a defined time and pay rental charges.

What is the GST rate on aircraft rental services under SAC 996603?

Aircraft rental and leasing services are generally taxed at the standard GST rate, usually 18%, on rental consideration. Certain leases for scheduled operations or export related activities may have special treatments. Lessors and lessees must check the latest aviation related GST rate and exemption notifications.

Should airline wet lease and dry lease contracts use SAC 996603?

Yes. When an airline or operator leases aircraft from another entity, contracts and invoices should usually mention SAC 996603. This correctly identifies the supply as aircraft rental or leasing, distinct from passenger transport or cargo carriage, and helps with proper GST accounting and ITC claims.

Is ITC allowed on GST paid for SAC 996603 services?

Where aircraft rentals are used for taxable business activities, lessees can typically claim ITC on GST charged, subject to general credit rules and any specific restrictions on aircraft. Lessors can also claim ITC on inputs used to provide leasing services, provided their outward supplies are taxable.

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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.