GST rate on monthly hiring of vehicle for internal transport and outside factory transport

This query is : Resolved

lingam (Querist)
Follow

06 February 2025 Dear Sir ,

Kindly guide me the exact GST rate with for commercial vehicle given on monthly hiring for within the factory transport and outside the factory transport for both rules follows RCM and FCM with notification

We are registered as GTA service provider

Please help

Thanks and regards
Lingam

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
Follow

12 August 2025 Hi Lingam,

Here's a clear explanation of GST rates and applicability on monthly hiring of commercial vehicles for internal and outside factory transport:

1. GST Rate on Monthly Hiring of Commercial Vehicles
GST Rate:
The GST rate on hiring of vehicles is generally 5% (without ITC) as per Notification No. 11/2017-Central Tax (Rate) and related notifications for renting of motor vehicles.

2. Applicability for Internal Factory Transport (Within Factory Premises)
If the vehicle is hired for transportation within the factory premises, it is usually considered a supply of services by way of renting of vehicle.

GST Rate: 5% (without ITC).

Reverse Charge Mechanism (RCM):

RCM does not apply if the service is received from a registered supplier.

If the supplier is unregistered and you are registered, RCM applies on GTA services only, not on renting vehicles.

Renting vehicle services are normally under Forward Charge Mechanism (FCM).

3. Applicability for Transport Outside Factory (Internal Transport of Goods/Employees)
For transport outside factory premises, like movement of goods or employees:

If you are receiving GTA (Goods Transport Agency) services, then GST is charged @ 5% without ITC, and RCM applies if GTA is unregistered.

For hiring of commercial vehicles (non-GTA), GST @ 5% (without ITC) applies under FCM.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now