GST on Passenger Transport Service

By | September 5, 2017
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(Last Updated On: September 5, 2017)

GST on Passenger Transport Service

Service classification for Passenger Transport Services is 9964. Groups under this heading are :-

  • Local Transport and sightseeing transportation service (99641)
  • Long Distance transport services of passengers (99642).
 Group 99641Local transport and sightseeing transportation services of passengers
996411Local land transport services of passengers by railways, metro, monorail, bus, tramway, autos, three wheelers, scooters and other motor vehicles
996412Taxi services including radio taxi and other similar services
996413Non-scheduled local bus and coach charter services
996414Other land transportation services of passengers
996415Local water transport services of passengers by ferries, cruises and the like
996416Sightseeing transportation services by rail, land, water and air
996419Other local transportation services of passengers nowhere else classified

 

 Group 99642Long-distance transport services of passengers
996421Long-distance transport services of passengers through rail network by railways, metro and the like
996422Long-distance transport services of passengers through road by bus, car, non-scheduled long distance bus and coach services, stage carriage and the like
996423Taxi services including radio taxi and other similar services
996424Coastal and transoceanic (overseas) water transport services of passengers by Ferries, Cruise Ships and the like
996425Domestic/ international scheduled air transport services of passengers
996426Domestic/international non-scheduled air transport services of passengers
996427Space transport services of passengers
996429Other long-distance transportation services of passengers nowhere else classified

Transport of passengers by rail

The local rail transport service falls under heading 996411 and long distance transport service falls under 996421.

GST Rates 

The GST rate is 5% (2.5% CGST and 2.5% SGST) or 5% IGST for travel in first class or air conditioned coach.

Input Tax Credit 

ITC of input services is available but not of goods – Sr No 8 of Notification No. 11/2017-Central Tax (Rates) and  Sr No 8 of Notification No 8 /2017-Integrated Tax (Rates) dated 28-6-2017, effective from 1-7-2017.

Exemption from GST

Services of transport by air in metro, monorail or tramway and in railways in class other that first class of Air conditioned coach are exempt from GST – Sr No 17 of Notification No. 12/2017-Central Tax (Rates) and Sr No 18 of Notification No 9/2017-Integrated Tax (Rates) both dated 28-6-2017, effective from 1-7-2017.

Transport of passengers by road

The local road transport service falls under group 99641 and long distance transport service falls under group 99642.

Road transport of passengers (with or without accompanies belongings) in following is taxable –

(a) air conditioned contract carriage other than motor cab

(b) air conditioned stage carriage

(c) radio taxi.

[ Sr No 8 of Notification No. 11/2017-Central Tax (Rates) and  Sr No 8 of Notification No 8 /2017-Integrated Tax (Rates) dated 28-6-2017, effective from 1-7-2017.]

“Contract carriage” has the meaning assigned to it in section 2(7) of the Motor Vehicles Act, 1988.

As per Section 2(7) of the Motor Vehicles Act  Contract carriage’ means a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether express or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sum—

(a) on a time basis, whether or not with reference to any route or distance; or

(b) from one point to another;- and in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey, – and includes—

(i) a maxi-cab; and

(ii) a motor-cab notwithstanding that separate fares are charged for its passengers.

Maxi cab – As per section 2(22) of Motor Vehicles Act, 1988 ‘maxi cab’ means any motor vehicle constructed or adapted to carry more than 6 passengers, but not more than 12 passengers, excluding the driver, for hire or reward. These vehicles are more popularly known as vans, Innova, sumo etc.

Thus a ‘contract carriage’ carries passengers as a group and cannot pick up passengers en-route.

Stage carriage” has the meaning assigned to it in section 2(40) of the Motor Vehicles Act, 1988.

As per section 2(40) of the Motor Vehicles Act, 1988 , ‘Stage Carriage‘ means a motor vehicle constructed or adopted to carry more than six passengers excluding the driver for hire or reward at separate fairs paid by or for individual passengers, either for the whole journey or for stages of the journey .

A ‘stage carriage’ is a motor vehicle which operates between fixed destinations. It can pick up passengers en-route. A ‘contract carriage’ carries passengers as a group and cannot pick up passengers en-route.

“Radio taxi” means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS).

GST Rates 

The GST rate is 5% (2.5% CGST and 2.5% SGST) or 5% IGST for travel in following  vehicles.

(a) air conditioned contract carriage other than motor cab

(b) air conditioned stage carriage

(c) radio taxi.

Transport of passengers in motorcab – GST rate on transport of passengers in motorcab, where cost of fuel is included in the consideration charged from the service recipient is 5% (2.5% CGST and 2.5% SGST) or 5% IGST. ITC on goods or services is not available.

If fuel is supplied by recipient of service, the GST rate will be 18% (9% CGST and 9% SGST) or 18% IGST.

Input Tax Credit

ITC of input services or goods is not available -Sr No 8 of Notification No. 11/2017-Central Tax (Rates) and  Sr No 8 of Notification No 8 /2017-Integrated Tax (Rates) dated 28-6-2017, effective from 1-7-2017.

GST Exemption 

i ) Exemption to passenger transport in non AC contract carriage and Non AC stage carriage  Following services of transport of passengers by road are exempt from GST vide   Sr No 15 of Notification No. 12/2017-Central Tax (Rate) and Sr No 16 Notification No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017 : –

(a) non-air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or

(b) stage carriage other than air-conditioned stage carriage

ii) Exemption to metered taxi and auto rickshaws = Transport of passengers in metered taxi or auto rickshaws (including e-rickshaws) is exempt from GST -Sr No 17 of  Notification No. 12/2017-Central Tax (Rate) and Sr No 18 of Notification  No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017.

iii) Services to Government relating to transport of passengers from and to regional connectivity airport – Services provided to the Central Government, by way of transport of passengers with or without accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme airport, against consideration in the form of viability gap funding are exempt from GST. – – This exemption will not apply on or after the expiry of a period of one year from the date of commencement of operations of the regional connectivity scheme airport as notified by the Ministry of Civil Aviation -Sr No 16 of  Notification No. 12/2017-Central Tax (Rate) and Sr No 17 of Notification  No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017.

Thus, in this case, GST is not payable under reverse charge in respect of viability gap funding provided by Government to the supplier of services of passenger transport to and from such airports.

iv. Service of giving motor vehicle on hire to state transport undertaking is exempt

Services by way of giving on hire to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers is exempt from GST – Sr No 22 of  Notification No. 12/2017-Central Tax (Rate) and Sr No 23 of Notification  No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017.

v. Toll charges exempt from GST

Service by way of access to a road or a bridge on payment of toll charges is exempt from GST – Sr No 23 of  Notification No. 12/2017-Central Tax (Rate) and Sr No 24 of Notification  No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017.

 Transport of passengers by water

The local water transport service falls under heading 996415 and long distance water transport service falls under group 996424.

GST Rate

The general GST rate is 18%.

[ Sr No 8(vii) of Notification No. 11/2017-Central Tax (Rates) and  Sr No 8 (vii) of Notification No 8 /2017-Integrated Tax (Rates) dated 28-6-2017, effective from 1-7-2017. ]

GST Exemption

Service of transportation of passengers in inland waterways is exempt from GST – Sr No 17 of  Notification No. 12/2017-Central Tax (Rate) and Sr No 18 of Notification  No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017.

 Transport of passengers by air

Air transport services falls under group 99642.

GST Rate and Input tax Credit :- 

In following cases, the rate is 5% (2.5% CGST and 2.5% SGST) or 5% IGST –

(a) economy class

(b) embarking from or terminating in regional connectivity scheme airport.

ITC of service is available but not of goods.

GST Rate in case of Transport of passengers by air in other than economy class is 12% (IGST Rate 12 %  or CGST Rate 6%  and SGST rate 6% . There is no restriction on availment of input tax credit.

 [ Sr No 8 of Notification No. 11/2017-Central Tax (Rates) and  Sr No 8 of Notification No 8 /2017-Integrated Tax (Rates) dated 28-6-2017, effective from 1-7-2017. ]

Exemption to air transport from and to airports in North East – Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal is exempt from GST – Sr No 15 of  Notification No. 12/2017-Central Tax (Rate) and Sr No 16 of Notification  No. 9/2017-Integrated Tax (Rate) both dated 28-6-2017, effective from 1-7-2017.

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