GST rate on monthly hiring of commercial vehicle given for transportation.
This query is : Resolved
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03 August 2025
Dear sir,
Please confirm GST rate is 12% or 18% transporter given commercial vehicle on monthly hiring basis for transportation of goods.
Thanks and regards
Lingam
Please confirm GST rate is 12% or 18% transporter given commercial vehicle on monthly hiring basis for transportation of goods.
Thanks and regards
Lingam
04 August 2025
If the service is provided by a Goods Transport Agency (GTA):
5% GST (without Input Tax Credit - ITC): The GTA can opt to pay GST at 5% if they do not avail ITC on their inputs. In this case, if the recipient of the service is one of the specified categories (e.g., a body corporate, factory, society, etc.), the recipient is generally liable to pay GST under the Reverse Charge Mechanism (RCM).
12% GST (with Input Tax Credit - ITC): The GTA can opt to pay GST at 12% and avail full ITC. If the GTA chooses this option and declares it annually, they will charge GST on their invoice (forward charge).
If the service is simply "rental services of transport vehicles with or without operators" and not by a GTA (i.e., no consignment note is issued and the primary service is the rental of the vehicle, not the transport of goods with responsibility for the goods):
In most cases, this service falls under SAC Code 9966 and attracts 18% GST. This is generally under the forward charge mechanism, meaning the transporter will charge you 18% GST on their invoice.
Therefore, it is essential to clarify with your transporter which of these scenarios applies to your specific arrangement.
5% GST (without Input Tax Credit - ITC): The GTA can opt to pay GST at 5% if they do not avail ITC on their inputs. In this case, if the recipient of the service is one of the specified categories (e.g., a body corporate, factory, society, etc.), the recipient is generally liable to pay GST under the Reverse Charge Mechanism (RCM).
12% GST (with Input Tax Credit - ITC): The GTA can opt to pay GST at 12% and avail full ITC. If the GTA chooses this option and declares it annually, they will charge GST on their invoice (forward charge).
If the service is simply "rental services of transport vehicles with or without operators" and not by a GTA (i.e., no consignment note is issued and the primary service is the rental of the vehicle, not the transport of goods with responsibility for the goods):
In most cases, this service falls under SAC Code 9966 and attracts 18% GST. This is generally under the forward charge mechanism, meaning the transporter will charge you 18% GST on their invoice.
Therefore, it is essential to clarify with your transporter which of these scenarios applies to your specific arrangement.
24 September 2025
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