??Desk of CA. Praveen Sharma Series- 501??GST on Transportation by Cab ?

The Goods and Services Tax (GST) on transportation services, including services provided by cabs, is governed under the GST law in India. The relevant sections and notifications provide the tax rates and exemptions applicable to such services. Here's a detailed explanation based on the applicable sections and notifications:

1. GST Rate on Cab Services

The GST rate on transportation services by cabs varies based on the type of service provided. As per the notifications issued under the GST law, the rates are as follows:

• 5% GST is applicable on transport of passengers by radio taxi, motorcab, and maxi cab without Input Tax Credit (ITC).
• 12% GST is applicable on transport of passengers, by contract carriage other than motorcab or bus, and radio taxi, with ITC charged on goods and services used in supplying the service.

2. Exemptions and Special Provisions

Certain exemptions and special provisions apply to transportation services under GST:

• Services by an auto-rickshaw are exempt from GST.
• Renting of a cab is exempt from GST where the cost of fuel is included in the consideration charged from the service recipient.

3. Relevant Sections and Notifications

• Section 9 of the CGST Act, 2017, and corresponding sections in the SGST Acts provide the levy and collection of GST on supply of services.
• Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 and subsequent amendments provide the tax rates for services under GST, including transportation services.
• Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 provides exemptions on various services including certain transportation services.

4. Input Tax Credit (ITC) for Transportation Services

The eligibility for claiming Input Tax Credit depends on the nature of the service and the use of the service in the course of business. For transportation services like cab services, businesses can claim ITC only if these services are used for making further taxable supplies.

Conclusion

GST on transportation by cab is determined based on the type of service provided and is subject to specific rates as outlined in the GST law and notifications. The availability of exemptions and the eligibility for Input Tax Credit also play a crucial role in determining the GST implications for these services. It's important for businesses and service providers to stay updated with the latest notifications and amendments to ensure compliance with the GST law.

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CA. Praveen Sharma