hiring for vehicle
This query is : Resolved
24 July 2017
GST rate on Hiring of Vehicle
25 July 2017
GST Service Rate Booklet https://www.caclubindia.com/share_files/details.asp?mod_id=73505
28 July 2024
Under the Goods and Services Tax (GST) regime in India, the GST rates applicable to the hiring of vehicles can vary depending on the type of vehicle and the nature of the service provided. Here’s a detailed overview:
### **1. GST Rate on Hiring of Vehicles:**
- **Renting of Motor Vehicles:** The standard GST rate for renting or hiring motor vehicles is **12%** (6% CGST + 6% SGST) under **Harmonized System of Nomenclature (HSN) Code 9966**.
- **Renting of Luxury Vehicles:** If the vehicle hired is a luxury vehicle, the GST rate can be **18%** (9% CGST + 9% SGST). Luxury vehicles typically refer to high-end vehicles and the rate can vary depending on specific classifications.
### **2. Specific Categories and Exceptions:**
- **Renting of Motor Vehicles for Transporting Passengers:** If the vehicle is hired for transporting passengers, the GST rate is **5%** (2.5% CGST + 2.5% SGST) if the vehicle has a seating capacity of more than 12 passengers (excluding the driver). This includes the hiring of buses and taxis for passenger transport.
- **Transportation of Goods:** If the vehicle is used for transporting goods, the hiring charges are generally subject to GST at **18%** (9% CGST + 9% SGST) or as per specific exemptions or lower rates applicable to transportation services.
### **3. Additional Points:**
- **Input Tax Credit (ITC):** Businesses can claim Input Tax Credit on GST paid for hiring vehicles used in their business, subject to the conditions specified under GST laws.
- **Exemptions and Special Cases:** Some special cases and exemptions may apply based on the specific nature of the hiring and the type of service provided. Always check the latest GST notifications and updates for any changes.
- **Reverse Charge Mechanism (RCM):** In some cases, the liability to pay GST under the reverse charge mechanism may apply, where the recipient of the service pays the GST instead of the supplier.
### **4. Practical Example:**
- **Hiring a Taxi for Passenger Transport:** If you hire a taxi to transport passengers, the GST rate is **5%**. For a taxi with a seating capacity of less than 12 passengers, the rate of **12%** would apply if it is not used for passenger transport.
- **Renting a Luxury Car:** If you rent a luxury car, the GST rate is likely to be **18%**.
### **Summary:**
The GST rate on the hiring of vehicles varies depending on the nature of the service and the type of vehicle:
- **12% GST** for general vehicle hiring.
- **5% GST** for renting motor vehicles for transporting passengers with more than 12 seats.
- **18% GST** for luxury vehicles or in cases of transportation of goods.
Always refer to the latest GST rates and notifications for any updates or changes.
### **1. GST Rate on Hiring of Vehicles:**
- **Renting of Motor Vehicles:** The standard GST rate for renting or hiring motor vehicles is **12%** (6% CGST + 6% SGST) under **Harmonized System of Nomenclature (HSN) Code 9966**.
- **Renting of Luxury Vehicles:** If the vehicle hired is a luxury vehicle, the GST rate can be **18%** (9% CGST + 9% SGST). Luxury vehicles typically refer to high-end vehicles and the rate can vary depending on specific classifications.
### **2. Specific Categories and Exceptions:**
- **Renting of Motor Vehicles for Transporting Passengers:** If the vehicle is hired for transporting passengers, the GST rate is **5%** (2.5% CGST + 2.5% SGST) if the vehicle has a seating capacity of more than 12 passengers (excluding the driver). This includes the hiring of buses and taxis for passenger transport.
- **Transportation of Goods:** If the vehicle is used for transporting goods, the hiring charges are generally subject to GST at **18%** (9% CGST + 9% SGST) or as per specific exemptions or lower rates applicable to transportation services.
### **3. Additional Points:**
- **Input Tax Credit (ITC):** Businesses can claim Input Tax Credit on GST paid for hiring vehicles used in their business, subject to the conditions specified under GST laws.
- **Exemptions and Special Cases:** Some special cases and exemptions may apply based on the specific nature of the hiring and the type of service provided. Always check the latest GST notifications and updates for any changes.
- **Reverse Charge Mechanism (RCM):** In some cases, the liability to pay GST under the reverse charge mechanism may apply, where the recipient of the service pays the GST instead of the supplier.
### **4. Practical Example:**
- **Hiring a Taxi for Passenger Transport:** If you hire a taxi to transport passengers, the GST rate is **5%**. For a taxi with a seating capacity of less than 12 passengers, the rate of **12%** would apply if it is not used for passenger transport.
- **Renting a Luxury Car:** If you rent a luxury car, the GST rate is likely to be **18%**.
### **Summary:**
The GST rate on the hiring of vehicles varies depending on the nature of the service and the type of vehicle:
- **12% GST** for general vehicle hiring.
- **5% GST** for renting motor vehicles for transporting passengers with more than 12 seats.
- **18% GST** for luxury vehicles or in cases of transportation of goods.
Always refer to the latest GST rates and notifications for any updates or changes.
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