The GST council has notified the GST rate for all the services. GST registration in India is compulsory for all individuals who have been specified as taxable persons under the GST law. A car or vehicle providing passenger services often gets involved in inter-state supply of services, GST registration is mandatory for all organizations involved in cab or passenger services. In this article, we will discuss GST on cab service and passenger services.

Impact of GST on Cab Service

The impact of GST on cab service has been explained below:

• The radio taxis, as well as AC buses, are liable to 6% service tax.
• Metered cabs, as well as auto-rickshaws that includes e-rickshaws, are not liable to pay GST.
• GST  for cab services is charged at the rate of 5% without ITC.
• On passenger services on cabs, Uber and Ola charge 5% GST.

Reverse Charge Mechanism or RCM in GST on Cab Service

• According to the notification made on RCM, the radio taxi companies need to pay GST under the RCM.
• Cabs for rent before used to have partial reverse charge mechanisms.
• If in case the service providers did not avail abatement the passengers of cabs were liable to pay 50% RCM.
• The other 50% was borne by the cab service provider.
• The entire duty of paying GST on cab services is on the service provider. They just charge GST @ 5% from the passengers whenever they avail themselves of services.

For example:

If you take a service from Uber and its driver is to receive Rs. 100 from Uber. The driver will receive Rs. 100 from Uber. Uber will also pay Rs. 5 t the Government. Uber collects GST on the fare. they can further claim ITC on the GST paid as per the RCM.

SAC Code for Rental Services

Organizations after getting GST registration in India needs to look at the SAC codes to pay the GST. SAC codes for rental services are:

• SAC code or all rental vehicles that include cars, motor vehicles, coaches, trucks and other vehicles- 996601
• SAC Code for Water Vehicle Rental services- Freight vessels, water vessels etc-996602
• SAC Codes for other Rental services- 996609

The rental services for vehicles are taxed differently under the GST for passenger transport services.

GST for Cab Service

• Motor cab where the fuel cost is borne by the recipient has a GST @ 18%.
• The leasing of aircraft is taxed at the rate of 5% where ITC is allowed for input services.

The following services under GST registration in India have been exempted from GST:

1. A motor vehicle that carries more than 12 passengers in a state transport.
2. A goods transport agency, that transports goods

Conclusion

Looking from the view of passengers GST on cab service has proved to be beneficial as it has decreased the travelling costs. However, the cab companies as well as the drivers face problems due to GST as it has increased the lease payments.

Taxboxindia.com can help in GST Registration,ISO Certification,FSSAI Registration,Company Registration,GST Return Filing,IEC Registration,RCMC,Income tax return filing,OPC formation,Partnership firm Registration and many more services. We have tried to conclude all the points related to above article,in case you need support for any registration and annual filing services,you can reach to us at info@taxboxindia.com,taxboxindia@gmail.com or post your query on https://www.taxboxindia.com/contact-us.php.