What GST rate applies to renting a cab with driver?

Passenger transport by a motor cab where fuel cost is included is commonly billed at 5% GST without input tax credit on most goods and services, or at 12% GST with full input tax credit. The operator must apply one option consistently.

Does reverse charge apply to cab services?

When a non-body-corporate operator supplies passenger transport to a body corporate at the 5% rate, GST is payable by the recipient under reverse charge. The invoice must state that tax is payable on reverse charge.

Are tolls and parking taxable in a cab invoice?

Tolls, parking and state permit charges recovered on actuals as a pure agent are shown separately and kept outside the taxable value. If they are recovered as part of the package price, they form part of the taxable value.

GST billing for travel agencies and taxi operators

Written from day-to-day billing practice at LR Taxi Services — corporate duty slips, monthly contract billing and government tenders. It covers the rate choice, what a compliant invoice must carry, and where operators most often lose money to rejected bills.

1. Choosing between 5% and 12%

Renting a motor cab with fuel included is billed either at 5% with no input tax credit on most inward supplies, or at 12% with full input tax credit. Operators running owned fleets with heavy vehicle purchases, insurance and repair invoices usually benefit from 12%, because the credit on those inputs outweighs the higher output tax. Aggregator-style operators who mostly hire in vehicles from small vendors tend to stay at 5%. Pick one and apply it consistently across the financial year — mixing rates across similar contracts invites notices.

2. Reverse charge on corporate contracts

If you are not a body corporate and you supply passenger transport to a company at 5%, the company pays the GST under reverse charge. Your invoice must carry the line “Tax payable on reverse charge basis by the recipient” and must not collect the tax. Getting this wrong is the single most common reason a corporate accounts team returns a taxi bill.

3. Fields a compliant tax invoice must carry

Supplier name, address and GSTIN; recipient name, address and GSTIN
Consecutive invoice number for the financial year, and invoice date
Place of supply with state code (decides CGST+SGST vs IGST)
HSN/SAC — 9964 for passenger transport, 9966 for renting a vehicle with operator
Description of service: vehicle type, package (e.g. 8 hrs / 80 km), duty dates, extra hours and extra kilometres
Taxable value, rate and amount of CGST/SGST or IGST
Reverse-charge declaration where applicable, and supplier signature or digital signature

4. Tolls, parking and pure-agent recoveries

Toll, parking, state permit and airport entry charges reimbursed on actuals can be kept out of the taxable value only if you meet the pure-agent conditions: the client authorised the payment, you recover the exact amount, and you show it separately on the invoice with supporting receipts. Bundle them into the package rate and they become taxable at the same rate as the ride.

5. Interstate duties and place of supply

For a registered recipient, place of supply is the recipient's registered location — a Delhi operator billing a Gurugram-registered client charges IGST even if the whole duty ran inside Delhi. For an unregistered passenger, it is where the passenger boards. Fleet software should derive this from the client GSTIN rather than the trip route.

6. E-invoicing and monthly filing rhythm

Above the notified aggregate-turnover threshold, B2B invoices must be reported to the Invoice Registration Portal and carry an IRN and QR code — a bill without one is not a valid tax invoice for your client's credit. Outward supplies go in GSTR-1, tax is settled in GSTR-3B, and any reverse-charge supplies must be reported even though you collect no tax on them. Reconcile duty slips to invoices before filing, not after.

7. Vendor-side TDS is separate from GST

When you pay attached vendors for their vehicles, 1% TDS applies to the taxable payment value, not to reimbursed tolls and parking. Keep the GST computation and the TDS computation in separate columns so the vendor statement reconciles with both the GST return and Form 26AS.

Billing this automatically

LR Billing turns duty slips into GST-ready invoices — package rates, extra hours and kilometres, tolls as pure-agent lines, correct CGST/SGST or IGST split from the client GSTIN, and vendor payouts with TDS deducted.

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This guide is general information on Indian GST practice for passenger-transport operators, not tax advice. Confirm rates and thresholds with your chartered accountant before filing.