In this article · 6 sections
GST confuses many taxi owners: when to register, which rate to charge, and whether corporate clients will accept your bills. Here's a plain-language guide to GST for taxi business after the rate changes that took effect on 22 September 2025.
Do you need GST registration?
- Required when turnover crosses the threshold for services in your state (commonly ₹20 lakh, lower in some special category states)
- Often needed earlier in practice, because corporate clients, hotels and travel agencies want GST invoices
- Required if you sell through certain platforms that collect tax on your behalf (check the platform's rules)
The two rate options (passenger transport by motor vehicle, fuel included)
| Option | Rate | Input tax credit |
|---|---|---|
| Lower rate | 5% | Only limited ITC (on input services in the same line of business) |
| Higher rate | 18% | Full ITC on vehicles, repairs, etc. as per rules |
The earlier 12% with ITC option was replaced by 18% with ITC in the September 2025 changes.
Which should you choose?
- 5% suits most small operators who bill individual customers and don't have large GST inputs
- 18% may suit operators with big GST purchases (new vehicles, heavy maintenance) and mainly business clients who can claim credit
- Ask a CA to compare with your actual numbers; the choice affects pricing and cash flow
Billing tips
- Show fare, tolls, parking, state taxes and GST clearly on invoices. See taxi fare calculation
- Use billing software that creates GST invoices and reports. See GST billing software and taxi billing software
- Keep trip records (date, route, km) for every invoice
- For corporate contracts, agree in writing whether rates are inclusive or exclusive of GST. See corporate taxi contracts
Common mistakes
- Charging GST without registration
- Adding GST on top of "all-inclusive" WhatsApp quotes later
- Not filing returns on time (late fees add up)
FAQs
Is GST charged on tolls and parking?
Reimbursements handled as a pure agent may be treated differently. Ask your CA how to show them on invoices.
Do I charge GST to NRI customers paying in India?
Services consumed in India are generally taxable as normal. Confirm with your CA.
This article is general information, not tax advice. GST rates and rules change; confirm with a CA and the latest notifications.
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