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 (three-wheelers) booked through apps remain exempt from GST.

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.

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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

Fully exempt

0%

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

ITC of same line of business only

5%

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

Full ITC available to operator and client

12%

Offline Local Taxi (below threshold)

Unregistered; below Rs 20L turnover

0%

Offline Local Taxi (registered)

Same rent-a-cab options apply

5% or 12%

Stage Carriage (public bus/minibus)

No ITC

5%

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

Auto-rickshaw (three-wheeler) passenger transport services are exempt from GST, whether the ride is booked through an aggregator app or directly from the driver on the street.

This exemption was clarified by the GST Council to maintain parity. Before the clarification, there was a concern that auto-rickshaw rides booked through apps would attract 5% GST while offline rides would remain exempt, creating an unfair tax on digitally-booked rides.

Rent-a-Cab: The 5% vs 12% 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. 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; vehicle is ITC-blocked anyway)

Option 2: 12% GST With Full ITC

• GST rate: 12%
• ITC available to operator: Full ITC on all inputs and input services
• ITC available to client company: Yes, the client can claim ITC on the 12% charged
• Best for: Operators with significant input costs (vehicle leasing, maintenance contracts, toll management services); corporate clients who want ITC

Which Option Is Better?

The choice is made for the entire financial year and cannot be changed mid-year. The decision depends on:

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 12% option less attractive than it appears for operators whose primary cost is fuel.

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 12% (Full ITC Option)

If the company contracts a rent-a-cab operator who charges 12% GST, the company can claim ITC on the full 12% 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

Employer Obligation Cases

Even when the employer is legally obligated to provide transportation (for example, factory workers under the Factories Act, or women employees working late shifts), the ITC rules remain the same: ITC is available only on 12%-rated cab services, not 5%.

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 12% as chosen
• If charging 12%, the invoice must clearly state the ITC-eligible amount

For Corporate Clients

Corporate clients should ensure:

• The invoice carries their company GSTIN
• The SAC code and GST rate are correctly stated
• For 12%-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

The place of supply for passenger transport services is the location where the passenger embarks (boards the vehicle). For inter-state rides:

Key Notifications and References

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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.