Impact of GST Rate for Passenger Transport Services

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July 24, 2019

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GST Council in India has decided the GST rate for goods and services. The GST Council consists of members from State Government as well as Central Government. After several meetings, the GST Council has successfully decided the GST rate. Now let us look at the GST rate for passenger transport services like air travels, railways, GST on bus services or taxi services and more.

Do Transport Service Providers need GST Registration?

The businesses which are involved in giving passenger transport services have to obtain GST registration and also file GST returns annually if their turnover is more than Rs 20 lakhs or they are involved in supplying inter-state services.

GST on Passenger Transport Services

In India, GST rates are connected to SAC (Service Accounting Code), a system of classification which was developed by the Service Tax Department in India for the purpose of service tax. Under SAC Code, there are two groups in which the passenger transport fall – group 99642 for long for distance transport services of passengers and group 99641 for sightseeing transportation and local passenger transport services.

Goods are classified using the HSN Code, which is an internationally accepted methodology for the classification of goods in the course of export or import by over 200 countries.

SAC for Sightseeing Transportation and Local Transport Services for Passengers

Given below are the SAC Codes for the services which fall under sightseeing Transportation and Local Transport Services for Passengers:

  • SAC Code 996411 – Local land transport services of passengers by metro, tramway, railways, monorail, bus, autos, scooters and other motor vehicles.
  • SAC Code 996412 – Taxi services which include radio taxi & other similar services.
  • SAC Code 996413 – Non-scheduled coach charter and local bus services.
  • SAC Code 996414 – Other land transportation services of passengers.
  • SAC Code 996415 – Local water transport services of passengers by cruises, ferries, etc.
  • SAC Code 996416 – Sightseeing transportation services by land, water, air and rail.
  • SAC Code 996419 – Other local transportation services for passengers.

SAC for Long Distance Transport Services of Passengers

Given below are the SAC Code for the services which fall under Long Distance Transport services for Passengers:

  • SAC Code 996421 – Long-distance transport services of passengers through Metro, Rail network by Railways, etc.,
  • SAC Code 996422 – Long-distance transport services of passengers through Road by Car, Bus, non-scheduled long distance bus and stage carriage, coach services, etc.,
  • SAC Code 996423 – Taxi services which include radio taxi & other similar services.
  • SAC Code 996424 – transoceanic (overseas) and Coastal water transport services for passengers by Cruise Ships, Ferries, etc.,
  • SAC Code 996425 – Domestic/International Scheduled Air transport services of passengers.
  • SAC Code 996426 – Domestic/international non-scheduled air transport services of Passengers.
  • SAC Code 996427 – Space transport services for passengers.
  • SAC Code 996429 – Other long-distance transportation services of passengers.

Rates of GST for Transport Services of Passengers

Points given below are the GST rates on passenger transport services ordered by the GST Council.

Railways: Other than sleeper class, the GST rate for transport of passengers by rail has been fixed @ 5% with ITC of input.

Read more: Impact of GST on Railway Tickets and Transport Services

Taxi Services: For renting of motorcabs wherein the fuel cost is borne by the service recipient, a GST rate of 18% will be applicable. With no ITC, GST rate of 5% will be applicable for the transport of passengers by an AC contract or stage carrier (i.e. buses) and radio taxis.

Air Travel: With ITC allowed on input services, the GST rate of 5% will be applicable to the transport of passengers by air in the economy class. With ITC allowed on input services, the GST rate of 5% is applicable for the transport of passengers, with or without accompanied belongings, by air, boarding or terminating in a Regional Connectivity Scheme Airport. With full ITC, GST rate of 12% will be applicable to the transport of passengers by air in other economy class.

Recommended: GST Rate on Aviation Sector

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