Exemptions in Transportation explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Public transport is largely outside GST — and then a proviso added in 2021 takes three of those exemptions away the moment the ride is booked through an app. That single change is the reason the same auto rickshaw ride is taxed differently depending on how it was hailed.
Entry 15 exempts (a) economy class air travel embarking from or terminating in the North-Eastern States or Bagdogra, (b) non-air-conditioned contract carriage other than radio taxi, excluding tourism, conducted tour, charter or hire, and (c) stage carriage other than air-conditioned stage carriage. Entry 17 exempts rail other than first class or AC coach, metro, monorail or tramway, inland waterways, public transport in a vessel between places in India other than predominantly for tourism, and metered cabs or auto rickshaws including e-rickshaws. Notification No. 16/2021-CT(Rate) dated 18.11.2021, w.e.f. 01.01.2022, disapplies items 15(b), 15(c) and 17(e) where supplied through an electronic commerce operator notified under section 9(5).
Entry 15: air, contract carriage and stage carriage
(a) The North-East and Bagdogra. Economy class air travel embarking from or terminating in an airport in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim or Tripura, or at Bagdogra in West Bengal.
Two limits. It is economy class only, and the flight must start or end at one of those airports.
The Handbook's example: "Ms. Ankita booked tickets for air travel from Jaipur to Guwahati (Assam). It would be exempt from GST."
And round trips are handled sector by sector. Per DOF No. 334/03/2010-TRU dated 01.07.2010, in round-trip tickets involving multiple journeys or sectors "the journey/flight/sector that involves embarkation or disembarkation at North-Eastern States/Bagdogra would alone be covered". The Handbook then adds the operative position: "In cases of flight embarking from or terminating on any of the airports mentioned in the Notification, the service provider shall have the benefit of exemption, irrespective of multiple journeys."
(b) Non-AC contract carriage, other than a radio taxi — and excluding tourism, conducted tour, charter or hire.
(c) Stage carriage other than an air-conditioned stage carriage.
The definitions of "contract carriage", "radio taxi" and "stage carriage" are in paras 2(t), 2(zv) and 2(zzh) of the notification.
Read the exclusions in (b) carefully. A non-AC bus on a regular route is exempt; the same bus hired for a tour is not, because tourism, conducted tour, charter and hire are all excluded.
Entry 17: five everyday modes
- (a) Railways in a class other than first class or an air-conditioned coach;
- (b) Metro, monorail or tramway;
- (c) Inland waterways;
- (d) Public transport, other than predominantly for tourism purpose, in a vessel between places located in India; and
- (e) Metered cabs or auto rickshaws (including e-rickshaws).
Definitions for "inland waterways", "metered cab" and "e-rickshaw" are in clause 2 of the notification.
The Handbook's example: "Ankesh booked his rail tickets in sleeper class from Jaipur to Mumbai. This is exempt from GST."
Item (d) has its own qualifier — "other than predominantly for tourism purpose" — so a ferry between two Indian ports is exempt and a harbour cruise is not.
The e-commerce proviso of 1 January 2022
Notification No. 16/2021-Central Tax (Rate) dated 18.11.2021, effective 01.01.2022, added a proviso to entry 15 and to entry 17:
the exemption shall not apply where the services are supplied through an electronic commerce operator and notified under section 9(5) of the CGST Act.
It affects three items:
| Item | Exempt if booked directly | Through a notified ECO |
|---|---|---|
| 15(b) non-AC contract carriage other than radio taxi | Exempt | Taxable, ECO liable under 9(5) |
| 15(c) non-AC stage carriage | Exempt | Taxable, ECO liable under 9(5) |
| 17(e) metered cabs, auto rickshaws, e-rickshaws | Exempt | Taxable, ECO liable under 9(5) |
The design is deliberate. The exemptions were written for public transport hailed on the street. Once the same ride is intermediated by a platform, section 9(5) makes the platform the deemed supplier, and the exemption is withdrawn so that the platform's supply bears tax. Section 9(5) and the deemed supplier →
Note the two limbs of the proviso. The service must be supplied through an ECO and be notified under section 9(5). A booking through a platform that is not a notified 9(5) service does not lose the exemption.
And note what the proviso does not touch. Entry 15(a) — North-Eastern economy flights — and entry 17(a) to (d) — rail, metro, inland waterways and public vessels — keep their exemption however they are booked.
Entry 16: the regional connectivity scheme
Also within the passenger group: services to the Central Government by way of transport of passengers by air embarking from or terminating at a regional connectivity scheme airport, against consideration in the form of viability gap funding — with the exemption lapsing three years from the date of commencement of operations of that RCS airport as notified by the Ministry of Civil Aviation. Exemptions on supplies to Government →
Two things that are not passenger transport
Joy rides. Circular No. 32/06/2018-GST dated 12.02.2018 clarified that "elephant / camel joy rides cannot be classified as transportation services. These services will attract GST @ 18% with threshold exemption being available to small service providers."
The reasoning matters more than the example. Transport moves a person from one place to another for that purpose; a joy ride is a recreational service that happens to involve movement.
Vehicles given on hire. Entry 22 exempts giving on hire a motor vehicle carrying more than twelve passengers to a State transport undertaking, an electrically operated vehicle carrying more than twelve passengers to a local authority, a means of transportation of goods to a GTA, and a motor vehicle for transport of students, faculty and staff to a person providing such transport to a school.
But hire is not transport. As the Handbook stresses: "the above exemption is given for giving the vehicle for hire to the specified person. In this exemption, the person has not been given exemption for actual transportation."
Key takeaways
- Entry 15 — North-Eastern and Bagdogra economy flights; non-AC contract carriage other than radio taxi, excluding tourism, conducted tour, charter or hire; non-AC stage carriage.
- Entry 17 — non-first-class, non-AC rail; metro, monorail, tramway; inland waterways; non-tourism public vessels; metered cabs, autos and e-rickshaws.
- From 01.01.2022, items 15(b), 15(c) and 17(e) lose the exemption when supplied through an ECO notified under section 9(5) — Notification No. 16/2021-CT(R).
- Rail, metro, waterways and North-Eastern flights keep their exemption however booked.
- A round trip touching a North-Eastern airport or Bagdogra carries the exemption irrespective of multiple journeys.
- Entry 16 exempts RCS flights against viability gap funding, for three years from the airport's commencement.
- Elephant and camel joy rides are not transport — 18% — Circular No. 32/06/2018.
- Entry 22 exempts hire of vehicles, not the transportation itself.
Read next
- Exemptions in Transportation of Goods: Entries 18 to 23
- Section 9(5): The Deemed Supplier, and Why It Is Not Reverse Charge
- Exemptions on Supplies Made to Government, Entry by Entry
Disclaimer: Positions stated as on 5 September 2026, based on entries 15, 16, 17 and 22 and paras 2(t), 2(zv) and 2(zzh) of Notification No. 12/2017-Central Tax (Rate), Notification No. 16/2021-Central Tax (Rate) dated 18 November 2021, section 9(5) of the CGST Act, 2017, Circular No. 32/06/2018-GST and DOF No. 334/03/2010-TRU, as reproduced in the ICAI Handbook on Exempted Supplies under GST (April 2025).