GST on Vehicle Repair & Car Service (2025-26)
Updated: 3 June 2026 | FY 2025-26 | CGST Act, GST Council Notifications
Labour/service component separately billed at 18% GST (SAC 9987)
GST Rates: Vehicle Repair Services & Parts at a Glance
| Item / Service | HSN / SAC | GST Rate | Notes |
|---|---|---|---|
| Labour / service charges (repair, maintenance) | SAC 9987 | 18% | Denting, painting, mechanical repair, AC service |
| Automobile spare parts (general) | HSN 8708 | 28% | Clutch plates, brake pads, filters, etc. |
| Tyres (new) | HSN 4011 | 28% | Including tubes (HSN 4013) |
| Lead-acid batteries | HSN 8507 | 18% | Car/truck batteries |
| Lithium-ion battery packs (EV) | HSN 8507.60 | 18% | EV battery replacement |
| Engine oils / lubricants | HSN 2710 | 18% | Gear oil, brake fluid, coolant |
| Windshield / safety glass | HSN 7007 | 18% | Laminated or toughened glass |
| Seat covers / upholstery | HSN 9401 | 18% | Fitted seat covers as accessories |
| Paint / body repair materials | HSN 3208 | 18% | Lacquers, enamels, varnishes |
| Insurance claim repair (composite) | SAC 9987 | 18% | GST raised on insurer; 18% on full repair bill |
| EV charging service at workshop | SAC 9987 | 18% | Treated as service; EV chargers HSN 8504 @18% |
Composite Supply at Authorized Service Centers
When an authorized service center provides both labour and spare parts on a single invoice, it may be a composite supply under GST law. If service (labour) is the principal supply, GST on the entire bill follows the service rate — 18% GST. However, most workshops issue a bifurcated invoice showing labour and parts separately, allowing 18% on labour and 28% on applicable parts. Always check the invoice format.
ITC on Vehicle Repair for Businesses
Input Tax Credit (ITC) on motor vehicle repair and maintenance is blocked under Section 17(5) of the CGST Act for vehicles not used for business transportation of goods/passengers or not used in specified businesses. Businesses that can claim ITC on vehicle repair include:
| Business Type | ITC on Vehicle Repair |
|---|---|
| Taxi / cab aggregator / cab owner | Available (vehicle used for transporting passengers) |
| Truck / logistics company | Available (transporting goods) |
| Car dealer / automobile manufacturer | Available (further supply of vehicles) |
| Driving school | Available (imparting training on driving) |
| Company car for employee commute | Blocked — personal use |
| Sales representative's car | Blocked — not direct transportation of goods |
| Automobile workshop itself | Available on its own business inputs and equipment |
Insurance Claim Repair: GST Flow
In a cashless insurance claim, the workshop raises a GST invoice on the insurance company. The insurer is the recipient of supply and pays the 18% GST. The policyholder pays only the deductible (if any), not the GST portion. In a reimbursement claim, the owner pays the full bill (including 18% GST) first, then claims reimbursement from the insurer. The GST rate does not change in either scenario.
GST Registration for Vehicle Repair Workshops
A vehicle repair workshop must register under GST if its annual turnover exceeds ₹20 lakh (₹10 lakh in special category states). Once registered, it must charge GST on all taxable services and parts. Small workshops under the threshold can opt for composition scheme (not applicable for service providers beyond ₹50L limit under composition). Workshops providing both goods and services must register as mixed supply businesses.
Frequently Asked Questions
Related Pages
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