GST rate on monthly hiring of commercial vehicle given for transportation.

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When hiring commercial vehicles monthly for goods transportation, the applicable GST rate depends on the service provider. If it's a Goods Transport Agency (GTA) offering services with a consignment note, the rate is typically 5% (without ITC) or 12% (with ITC). However, if the service is purely a rental of the vehicle, even with an operator, and not a GTA service, the GST rate is generally 18%. It's crucial to confirm the specifics of your arrangement with the transporter.

lingam

lingam (Querist)

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

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

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.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

24 September 2025 Good Luck...

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