GST on transportation ranges from fully exempt to 18% depending on the mode. Road freight by a GTA is taxed at 5% under Reverse Charge (RCM) by default — the registered recipient pays. A GTA can instead opt for forward charge at 5% (no ITC) or 18% with full ITC. Courier and multimodal transport are 18%, air travel is 5% (economy) / 18% (premium), and cab-aggregator rides are 5%.
GST Rate — All Transport Modes
The GST rate for every common transport scenario in India after the GST 2.0 rationalisation, with who pays and ITC eligibility.
| Transport Type | GST Rate | Who Pays / ITC | Notes |
|---|---|---|---|
| GTA road freight — reverse charge (default) | 5% | Recipient pays; can claim ITC | Registered recipient under RCM |
| GTA road freight — forward charge, no ITC | 5% | GTA pays; No ITC | GTA opts in |
| GTA road freight — forward charge, with ITC | 18% | GTA pays; Full ITC | Replaces old 12% option |
| Non-GTA road transport (no consignment note) | Exempt | — | Truck hired without consignment note |
| Courier / express delivery | 18% | Courier company; ITC to recipient | BlueDart, DTDC, Delhivery, etc. |
| Multimodal transport of goods | 18% | Operator; ITC available | More than one mode of transport |
| Domestic air — economy class | 5% | Airline | On base fare |
| Domestic air — premium / business / first | 18% | Airline | Was 12% before 22 Sep 2025 |
| International air (all classes) | Exempt | — | — |
| Cab aggregators (Ola, Uber, Rapido) | 5% | Aggregator (Sec 9(5)); No ITC | App-based rides |
| Radio taxi / rented cab (non-aggregator) | 5% | Operator; No ITC | — |
| Rail freight (other than Indian Railways) | 5% | Provider; restricted ITC | Or 18% with full ITC |
| Rail passenger — AC & first class | 5% | Railways | — |
| Rail passenger — sleeper / non-AC | Exempt | — | — |
| Metro / monorail | Exempt | — | — |
| Auto-rickshaw (incl. app-based) | Exempt | — | — |
| AC contract-carriage bus | 5% | Operator | — |
| Non-AC / ordinary stage bus | Exempt | — | — |
| Inland waterway transport of goods | 5% | — | — |
Rates reflect the GST 2.0 changes effective 22 September 2025 (CBIC Notifications dated 17 Sep 2025). Confirm on the official GST portal before invoicing.
GTA & the Reverse Charge Mechanism
A Goods Transport Agency (GTA) is any person who transports goods by road and issues a consignment note. This is the most common form of freight movement in India and has a special GST treatment. By default the tax is paid by the recipient under RCM.
- 1GTATransports goods & issues consignment note
- 2InvoiceStates "GST payable by recipient under RCM"
- 3RecipientSelf-pays 5% GST directly to the government
- 4ITCRegistered recipient claims it as input credit
RCM applies when the recipient is a factory, registered dealer, body corporate, partnership firm, co-operative society, or any GST-registered person — and the GTA has not chosen forward charge with ITC.
Before 22 September 2025 a GTA opting for forward charge with ITC charged 12%. Under GST 2.0 that option is now 18% with full ITC. The 5%-without-ITC forward-charge option and the 5% RCM default are unchanged. Large fleet operators with heavy input GST (fuel, tyres, maintenance) may still prefer 18% to recover ITC.
Exempt GTA transport includes: agricultural produce; milk, salt and food grains; newspapers/magazines; relief materials for disasters; defence equipment; and where the total freight for a single consignee does not exceed the specified small-value limit.
Running a transport business or paying freight under RCM? Get your GTA position confirmed.
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5% RCM vs 18% Forward Charge — Which to Choose?
A GTA effectively chooses between staying on the simple 5% RCM/no-ITC model or opting for 18% forward charge with full ITC. The right answer depends on how much input GST you carry.
RCM / forward charge without ITC
- Simplest for small & mid transporters
- Recipient pays under RCM by default
- No ITC on fuel, tyres, maintenance
- Lower headline rate for customers
- No forward-charge compliance to opt in
Forward charge with full ITC
- Best for large fleets with heavy input GST
- GTA collects & pays 18%, claims full ITC
- Recovers GST on fuel, spares, insurance
- Registered customers claim the 18% as ITC
- Requires an annual forward-charge declaration
How the Freight GST Adds Up — ₹10,000
5% GTA freight under RCM
18% GTA forward charge + ITC
*Under 5% RCM the recipient self-pays ₹500 GST and, if registered, claims it back as ITC — so the effective freight cost stays ₹10,000. Under 18% forward charge the GTA claims ITC on its own inputs while the registered customer claims the ₹1,800 as credit.
The headline rate is not the real cost. A GTA on 18% forward charge that recovers heavy input GST can be cheaper overall than a 5% operator who absorbs blocked input tax and prices it into the freight. Model both before deciding.
Not sure whether 5% RCM or 18% forward charge suits your fleet?
Get a GTA Rate Review →Passenger Transport — Cabs, Air, Rail & Bus
Passenger transport follows a different set of rules. Cab aggregators pay under a special provision, air fares split by cabin class, and much of public transport is exempt.
| Passenger Service | GST Rate | Who Pays |
|---|---|---|
| Cab aggregator ride (Ola / Uber / Rapido) | 5% | Aggregator under Section 9(5) |
| Radio taxi / rented cab (non-aggregator) | 5% | Operator |
| Auto-rickshaw (incl. app-booked) | Exempt | — |
| Domestic air — economy | 5% | Airline |
| Domestic air — premium / business | 18% | Airline |
| Rail — AC & first class | 5% | Indian Railways |
| Rail — sleeper / non-AC | Exempt | — |
| Non-AC stage-carriage bus | Exempt | — |
| AC contract-carriage bus | 5% | Operator |
Under Section 9(5) of the CGST Act, cab aggregators (Ola, Uber, Rapido) are liable to pay 5% GST on rides booked through their apps even though the ride is provided by individual driver-partners. The driver-partner is not separately liable for GST on those rides.
From 22 September 2025, premium-cabin (premium economy, business and first class) domestic air tickets attract 18% GST, up from 12%. Economy stays at 5% and international travel remains exempt. The rate is fixed by the booking/payment date, not the travel date.
ITC on Transportation — When Can You Claim?
Businesses can generally claim Input Tax Credit on GST paid for transporting goods used in business. Passenger-transport credit, however, is largely blocked.
✓ITC generally available
- GST on inward freight for business goods (GTA)
- 5% RCM freight paid by a registered recipient
- 18% forward-charge GTA invoices
- Courier and multimodal transport of business goods
!ITC blocked / not available
- Cab, taxi and rented-vehicle hire — Sec 17(5)(b)
- Air/rail tickets for staff travel (unless it is your business)
- GTA that chooses the 5%-without-ITC forward option
- Personal or non-business transport
- Correct SAC classification per mode
- GTA forward-charge vs RCM decision
- Self-invoice for RCM freight
- RCM GST paid in GSTR-3B
- ITC reconciliation against GSTR-2B
- Consignment notes on file
- E-way bill where applicable
The one exception to the passenger-transport ITC block is when transporting persons is itself your business — a tour operator, cab fleet or bus operator can claim ITC on vehicles and inputs used to provide the taxable service.
- Rates & notifications: gst.gov.in
- CBIC rate finder: cbic-gst.gov.in
- GST 2.0 service-rate changes: CBIC Notifications dated 17 Sep 2025 (eff. 22 Sep 2025)
- GTA definition update: Notification 16/2025-Central Tax (Rate)
- Cab-aggregator liability: Section 9(5), CGST Act 2017
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.