GST on Cab, Taxi and Ride-Hailing Services in India: Rates and Rules

What is the GST rate on cab and taxi rides in India in 2026? Cab rides booked through electronic commerce operators (aggregators) like Uber, Ola, and Rapido attract 5% GST under Section 9(5) of the CGST Act. The aggregator is deemed the supplier and is responsible for collecting and remitting the GST. Auto-rickshaw rides hired on the street are exempt, but since 1 January 2022 auto rides booked through an app attract 5% GST, paid by the aggregator.

Every time you book an Uber or Ola ride, 5% GST is built into the fare. But the GST mechanics behind cab services are more layered than a single rate suggests. Who pays the GST, whether the driver needs registration, how rent-a-cab differs from ride-hailing, and whether your company can claim ITC on employee cab bills: these are the questions this guide answers.

GST Rate Structure for Cab and Taxi Services

The GST treatment of cab services depends on three factors: how the ride is booked (aggregator vs offline), the type of vehicle (motor cab vs auto-rickshaw), and the nature of the service (point-to-point ride vs rent-a-cab).

Tax Rate Chart

GST Rates on Cab and Taxi Services (2026)

Effective September 22, 2025 (GST 2.0)

Cab via Aggregator (Uber, Ola, Rapido)

Section 9(5); no ITC for user

5%

Auto-Rickshaw via Aggregator

Section 9(5); exemption withdrawn from 1 Jan 2022

5%

Rent-a-Cab (Option 1: No ITC)

ITC of same line of business only

5%

Rent-a-Cab (Option 2: Full ITC)

Full ITC for operator; replaced 12% from 22 Sep 2025

18%

Offline Metered Taxi or Auto-Rickshaw

Exempt when not booked through an app

0%

Offline Cab Hire by Registered Operator

Same rent-a-cab options apply

5% or 18%

Non-AC Stage Carriage Bus (offline)

Exempt; AC buses taxable

0%

Source: Notification No. 11/2017-CT(R) as amended; Section 9(5) CGST Act 2017; GST 2.0 rate revision

Section 9(5): How Aggregator GST Works

What Section 9(5) Says

Section 9(5) of the CGST Act states that for certain notified categories of services supplied through an electronic commerce operator (ECO), the ECO is deemed to be the supplier and must pay GST. Transportation of passengers by motor cab is one of these notified categories.

In plain language: when you book a cab through Uber or Ola, the law treats Uber or Ola as the person who supplied the transportation service to you, not the driver. Uber or Ola collects the fare, deducts GST at 5%, and remits it to the government.

What This Means for Drivers

The driver is not the supplier for GST purposes when operating through an aggregator. This has three practical consequences:

1. No GST registration required: The driver does not need to obtain a GSTIN, because the aggregator handles the GST liability.
2. No GST return filing: The driver does not file GSTR-1 or GSTR-3B for aggregator rides.
3. No ITC claims: Since the driver is not registered and does not pay GST, they cannot claim ITC on fuel, vehicle maintenance, or other expenses related to aggregator rides.

What This Means for Aggregators

The aggregator must:

• Register for GST in every state where it operates
• Collect 5% GST on the total ride fare (base fare + surge + convenience fee)
• File GSTR-1 and GSTR-3B for all rides
• Maintain state-wise records of rides, fares, and GST collected

Driver Operating Outside Aggregator Platforms

If a driver also takes rides independently (not through any aggregator), those rides are treated as a separate supply. If the driver's independent turnover exceeds Rs 20 lakh (Rs 10 lakh in special category states), the driver must obtain GST registration and charge GST on independent rides.

Auto-Rickshaw Exemption

Passenger transport by auto-rickshaws (including e-rickshaws) and metered cabs is exempt from GST when the ride is hired directly, for example on the street or at a stand.

From 1 January 2022, Notification 16/2021-Central Tax (Rate) withdrew this exemption for rides supplied through an electronic commerce operator. So an auto ride booked through Uber, Ola or Rapido attracts 5% GST, which the aggregator pays under Section 9(5). The driver still does not need to register for these rides.

Rent-a-Cab: The 5% vs 18% Choice

Rent-a-cab services (hiring a vehicle with a driver for a defined period, route, or contract) have a different GST structure from point-to-point ride-hailing. If the customer drives the car and buys the fuel, it isn't rent-a-cab at all: the rental takes the vehicle's own GST rate, as our self-drive car and bike rental GST guide explains. With a driver, the operator has two options:

Option 1: 5% GST Without ITC

• GST rate: 5%
• ITC available to operator: Only ITC on input services in the same line of business (transportation)
• ITC available to client company: No
• Best for: Operators with low input costs (fuel is outside GST, so there is no credit on it)

Option 2: 18% GST With Full ITC

• GST rate: 18% (this replaced the earlier 12% option from 22 September 2025)
• ITC available to operator: Full ITC on inputs, input services and the vehicles used for the service
• ITC available to client company: Yes, where the use is not blocked under Section 17(5)
• Best for: Operators with significant input costs (vehicle purchase, leasing, maintenance contracts); corporate clients who can use the ITC

Which Option Is Better?

The decision depends on how much GST the operator pays on its own costs and whether its clients can use the credit.

Important: Fuel (petrol/diesel) is outside the GST regime, so ITC on fuel is not available regardless of which option is chosen. This makes the 18% option less attractive than it appears for operators whose primary cost is fuel.

The same two options apply to buses and tempo travellers hired out with driver and fuel. Our guide for tourist bus operators covers the bus-specific exemptions for state transport and school hire.

Corporate Employee Cab Services: ITC Rules

Many companies provide cab services for employee commute. The ITC treatment depends on which rate the cab operator charges:

Cab at 5% (No ITC Option or Aggregator Booking)

If the company books cabs through an aggregator (Uber, Ola) or a rent-a-cab operator charging 5%, the company cannot claim ITC on these cab charges. The 5% rate comes with the condition of no ITC to the service recipient.

Cab at 18% (Full ITC Option)

If the company contracts a rent-a-cab operator who charges 18% GST for business travel, the company can claim ITC on the GST charged. This requires:

• A proper tax invoice from the cab operator with company's GSTIN
• The cab service must be used for business purposes
• The invoice must appear in the company's GSTR-2B

Employee Commute and Employer Obligation

Section 17(5)(b) blocks ITC on renting or hiring of motor vehicles for employees, unless the employer is obliged under a law in force to provide it to its employees. So ITC on routine staff pick-up and drop is usually blocked. Where a law in force requires the employer to provide transport, the company can claim ITC on a proper tax invoice from an operator charging 18%.

Subscription and SaaS-Model Platforms

The emergence of platforms like Namma Yatri, Rapido, and InDrive has created a grey area in Section 9(5) applicability:

The Traditional Aggregator Model

Uber and Ola operate as traditional aggregators: they set the fare, collect the payment, take a commission, and pay the driver. Section 9(5) clearly applies because the platform controls the pricing and collection.

The SaaS/Subscription Model

Platforms like Namma Yatri charge drivers a flat subscription fee for access to the platform. The driver sets the fare, the passenger pays the driver directly (or through the app as a pass-through), and the platform does not take a per-ride commission.

The GST question: Is a SaaS-model platform an "electronic commerce operator" under Section 9(5)?

Some Advance Ruling Authorities have held that platforms like Namma Yatri, which do not control pricing or collect consideration on behalf of the driver, may not qualify as ECOs under Section 9(5). If the platform is not an ECO, the GST liability falls back on the individual driver (who may be below the registration threshold, making the ride effectively GST-free).

Current status (August 2026): The GST Council has indicated it will review the Section 9(5) scope for subscription-based platforms. Until a formal clarification is issued, most platforms continue to charge 5% GST on rides as a conservative position.

Invoicing and Documentation

For Aggregators

The aggregator (Uber, Ola) issues the invoice for GST purposes. The invoice typically appears as a digital receipt in the app and contains:

• Aggregator's GSTIN
• Ride details (date, pickup, drop, distance)
• Base fare, surge/dynamic pricing, convenience fee
• GST amount at 5% (CGST 2.5% + SGST/UTGST 2.5% for intra-state; IGST 5% for inter-state)
• Total fare including GST

For Rent-a-Cab Operators

The cab operator issues a tax invoice with:

• Operator's GSTIN
• SAC code: 9964 (passenger transport services) or 9966 (rental services of transport vehicles)
• GST rate: either 5% or 18% as chosen

For Corporate Clients

Corporate clients should ensure:

• The invoice carries their company GSTIN
• The SAC code and GST rate are correctly stated
• For 18%-rated services, the invoice appears in their GSTR-2B for ITC claim
• For 5%-rated services, do not claim ITC (it will be denied on audit)

Place of Supply for Cab Services

Under Section 12(9) of the IGST Act, the place of supply of passenger transport to a registered person is the location of that person. For any other passenger, it is the place where the passenger embarks on the conveyance for a continuous journey. A ride starting and ending in the same state is taxed as CGST plus SGST; a rented cab for a registered company in another state is taxed as IGST.

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This guide is based on the CGST Act 2017 (as amended), GST Council notifications, and Advance Ruling Authority decisions current as of August 2026. The applicability of Section 9(5) to subscription-based platforms is under review. Consult a Chartered Accountant for advice specific to your cab or fleet business.