GST on Rent a Car Service
This query is : Resolved
30 December 2025
Taxpayer is having a rent a car business. He gives car to customers. Car is driven by customer & customer only fill the fuel. Taxpayer gets the daily rent amount. In this service, taxpayer has option to pay GST @ 5% without ITC ? Or taxpayer has to pay 18% GST with ITC & no GST @ 5% without ITC ? Or is it better he opt composition @ 6% ?
02 January 2026
GST @ 5% without ITC: ✔ Allowed & generally best
GST @ 18% with ITC: ✔ Allowed (useful in limited cases)
Composition @ 6%: ❌ Not allowed
Recommended option: 5% without ITC for most rent-a-car businesses
GST @ 18% with ITC: ✔ Allowed (useful in limited cases)
Composition @ 6%: ❌ Not allowed
Recommended option: 5% without ITC for most rent-a-car businesses
19 January 2026
But Sir; 5% without ITC is available for taxi business or where cost of fuel is included in consideration. Here there is no cost of fuel in consideration. Cost of fuel is borne by the customer. In such cases only gst 18% with ITC available & cannot opt 5% without ITC.
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