In short
| Item | What applies | Since | Good to know |
|---|---|---|---|
| Who it covers | Supplier: anyone that is not a body corporate (proprietor, HUF, firm, trust, society). Customer: a body corporate, such as a company or LLP. | 1 Oct 2019 | Company and LLP suppliers are never covered. |
| When the company pays the GST | Unless the supplier's bill charges 18% | 1 Nov 2026 | From 31 Dec 2019 to 31 Oct 2026 the rule said 12%. |
| Rate the company pays | 5% | 1 Oct 2019 | CGST + SGST or IGST, by place of supply. |
| Self-invoice when the supplier is unregistered | Within 30 days of the service | 1 Nov 2024 | Plus a payment voucher when you pay. |
| IRN on that self-invoice | Needed if you are on e-invoicing | 1 Jan 2027 | Supply type RCMDOM. |
Current, upcoming and expired rules
Current is what applies today. Upcoming is notified and starts later. Expired shows what applied before, from which date to which date, for when an old invoice or a notice asks.
Rules as on 31 Oct 2026 (India time). A rule moves between the tabs on its own when its start or end date passes.
| Rule | Rate | Dates | Law and source |
|---|---|---|---|
| Reverse-charge self-invoice within 30 daysA registered business paying reverse charge on a purchase from an unregistered supplier must issue the self-invoice within 30 days of receiving the goods or services. A supplier registered only to deduct TDS counts as unregistered. For services, the tax falls due on the earlier of the payment date and the date of this self-invoice. | — | Since 1 Nov 2024 | CGST Act s.31(3)(f) and s.13(3)(c) (Finance (No. 2) Act 2024, in force by 17/2024-CT); rule 47A, inserted by 20/2024-CT Checked against the textNotification 20/2024-Central TaxNotification 17/2024-Central TaxCGST Act s.31 (CBIC) |
| Reverse charge unless the supplier charges 12%Renting a passenger vehicle with fuel to a body corporate, by any supplier that is not a body corporate (a proprietor, HUF, firm, trust or society), is under reverse charge unless the supplier's invoice charges 12% (6% CGST). The company pays 5% and the supplier charges none. CBIC said this wording also explains the earlier period.Our reading: From 22 Sep 2025 the with-credit rate was 18%, but this entry still said 12% until 31 Oct 2026. Read literally, an 18% bill from a proprietor or firm was still under reverse charge, so the company could be asked to pay again. That looks unintended to us, since 18% replaced 12% as the with-credit option, but the entry was corrected only from 1 Nov 2026. If you have such bills, ask your CA. | 5%, paid by the company | 31 Dec 2019 – 31 Oct 2026 | 29/2019-CT(Rate), substituting S.No. 15 of 13/2017-CT(Rate); Circular 130/49/2019-GST Checked against the textNotification 29/2019-CT(Rate)Circular 130/49/2019-GST |
| Reverse charge on unregistered purchases only in notified casesBuying from an unregistered person triggers this reverse charge only for categories the government notifies, such as some real-estate purchases. Cab hire to companies is a separate reverse-charge entry and still applies. | — | Since 1 Feb 2019 | CGST Act s.9(4) as substituted from 1 Feb 2019 Checked against the textCGST Act s.9 (CBIC) |
Checked against the government text Official copy not yet online; matched across published copies The law is unclear; this is our reading
On a timeline
Each line is one rule; each bar is one period. Grey has ended, green applies today, amber starts later.
Who can claim GST credit
Input tax credit (ITC) is GST you paid on a purchase that you subtract from the GST you collect. Whether you get it depends on who you are and what you bought.
| Who | Buys | Can claim? | Condition |
|---|---|---|---|
| Cab operator on the 5% option | Cab or bus hire bought from another operator for your own customer | Yes, up to 5% | This is the one credit the 5% option allows. Since 20 Oct 2023 it is capped at 5% of the hire value: if the other operator charged 12% or 18%, the extra is your cost. From 13 Oct 2017 to 19 Oct 2023 there was no cap; before 13 Oct 2017 the 5% option allowed no credit at all. Electric-cab entries from 1 Nov 2026 have the same 5% cap.11/2017-CT(Rate) S.No. 8(vi), 10(i); 31/2017, 12/2023, 06/2026-CT(Rate) |
| Cab operator on the 5% option | Cars, servicing, tyres, insurance, software, office rent | No | The 5% option allows no credit except on hire bought from other operators.11/2017-CT(Rate) S.No. 8(vi), 10(i) |
| Cab operator on the 18% option | Cars and buses used to carry passengers | YesOur reading | The vehicle must be used to carry passengers in the business; a car kept for the owner's own use stays blocked. A 2019 West Bengal advance ruling refused this credit on cars given on monthly rental with driver, calling it renting, not passenger transport.CGST Act s.17(5)(a); WB AAR 08/WBAAR/2019-20 |
| Cab operator on the 18% option | Servicing, repairs and insurance of those vehicles, software, office rent | Yes | Used for the business. For servicing and insurance, the vehicle itself must qualify.CGST Act s.16, s.17(5)(ab) |
| Any operator | Diesel, petrol or CNG | No | These fuels are outside GST, so the bill carries no GST to claim.CGST Act s.9(2) |
| Any operator | Toll paid at a toll plaza | Nothing to claim | Access to a road or bridge on payment of toll is exempt from GST, so the toll receipt carries no GST.12/2017-CT(Rate) entry 23 |
| Cab operator on the 18% option | Paid parking at a private lot, mall or airport | Yes | Private parking carries 18% GST, which you can claim when it is for your business and the bill shows your GSTIN. On the 5% option it is a cost. Parking run by a municipality itself is exempt, so there is nothing to claim.11/2017-CT(Rate) S.No. 11 (heading 9967); 12/2017-CT(Rate) entry 4 |
| A company that is not in the travel trade | Cars of up to 13 seats hired with driver for staff or guests | No | Blocked. It is allowed only if a law makes the employer provide the transport, or the company uses the hire to supply the same kind of service or as part of a taxable composite or mixed supply. Example of the first: Tamil Nadu makes employers provide transport for women staff working between 8 pm and 6 am, and two Tamil Nadu advance rulings allowed credit for those trips only, from 28 May 2019.CGST Act s.17(5)(b)(i) and provisos; Circular 172/04/2022-GST; TN AAR 14/ARA/2023, 18/ARA/2026 |
| A company that is not in the travel trade | A bus or tempo traveller of more than 13 seats hired for business use | Usually yes | Vehicles of more than 13 seats are outside the blocked list since 1 Feb 2019, and advance rulings in Maharashtra, Gujarat and Haryana allowed this credit. The hire must be for the business. Where staff pay part of the cost, credit is limited to the employer's share.CGST Act s.16, s.17(5)(b)(i); Maharashtra AAR (Tata Motors, 2020); Gujarat AAR (Emcure, 2022); Haryana AAAR (YKK India, 2019) |
| Another cab operator buying from you | Your cab hire, to serve its own customer | Yes | It is in the same line of business, so it can claim the GST on your bill: in full if it is on the 18% option, and only up to 5% of the hire value if it is on the 5% option.CGST Act s.17(5)(b)(i) proviso; 11/2017-CT(Rate) S.No. 8(vi), 10(i); 12/2023-CT(Rate) |
| An event company | Cab hire used to deliver an event it bills for | Yes | Allowed when the hire is part of a taxable composite or mixed supply the company makes.CGST Act s.17(5)(b)(i) proviso |
What courts and rulings have said
Judgments and advance rulings that explain a rule, including ones that pull in different directions. Weigh them by who gave them: a Supreme Court judgment binds every court in India; a High Court’s is followed by courts and tax officers in its State and is persuasive elsewhere; an advance ruling (AAR or AAAR) binds only the business that asked for it and its tax officer (section 103 of the CGST Act).
| Ruling | Question and answer | Weight |
|---|---|---|
| High CourtCommissioner of Income Tax-XII v. Gurpreet Singh (proprietor, Harmony Travels)Delhi High Court, 9 Oct 2013ITA 463/2013 | Must a travel operator who hires cars and taxis from owners, but pays the drivers and fuel itself, deduct TDS under s.194C(2) on the hire paid?No. Section 194C(2) needs a contract for work with labour, such as carriage of passengers; taking a vehicle without driver and fuel is not covered. The Revenue's appeal was dismissed at the threshold because the Tribunal had found as a fact that the operator paid fuel and drivers.“Taking a vehicle/taxi, without driver and fuel is not covered.”Income-tax Act 1961 s.194C(2) and Explanation (work includes carriage of passengers), s.40(a)(ia); s.194-IDelhi High Court order | Turns on its factsIncome-tax authorities and the Tribunal in Delhi; persuasive elsewhereNone known. Decided under the 1961 Act on section 194C only; it does not say whether section 194-I applies instead. |
| AAARM/s Ion Trading India Private LimitedUttar Pradesh AAAR, 16 Mar 2020Order No. 11/AAAR/16/03/2020 (appeal against AAR Order No. 42 dated 27-09-2019) | When a company rents parking spaces and recovers exactly the same amount from the employees who use them, is that taxable and at what value?It is a supply of service, but its value is nil if the company meets the pure-agent conditions of Rule 33: it acts on the employees' authorisation, does not use the spaces for itself, and passes on exactly what it pays. Not a travel case, but it shows when a recovered expense can stay out of the taxable value.“the value of the services in the present case will be NIL, as the appellant is providing the same in the capacity of a Pure Agent”CGST Rules r.33 (pure agent); CGST Act s.7(1), s.15AAAR order PDF, scanned (GST Council)Patron Accounting summary (secondary) | Turns on its factsOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereNone known. Contrast the Tamil Nadu AAR in NTL India (2022): tolls a vehicle-rental firm recovered were part of the value. |
| AAARM/s YKK India Pvt Ltd, Bawal, Rewari (appellant)Haryana AAAR, Jun 2019HAR/AAAR/2018-19/03 (appeal against Haryana AAR ruling HAR/HAAR/R/2018-19/04 dated 11-07-2018) | Can a factory claim ITC on GST charged for hiring buses and cars, with drivers, to bring employees to work?Buses with more than 13 approved seats: yes, after the 2018 amendment; before it, no. Cars and vehicles of up to 13 seats: no ITC before or after the amendment, because the rent-a-cab and vehicle-hire block applies. This modified the Haryana AAR ruling of 11-07-2018, which had refused ITC on both.“the appellant is eligible to input tax credit of the GST charged by the Contractor for hiring of buses only having approved seating capacity of more than thirteen persons”CGST Act s.17(5)(a) and s.17(5)(b)(i) (from 01-02-2019); old s.17(5)(b)(iii) 'rent-a-cab'Haryana AAAR order, official PDF (GST Council)GST Council listing page for the order | ClarifiesOnly YKK India and its jurisdictional tax officers (s.103).No further challenge found. The order dates the change from 30 Aug 2018, when the amending Act was published, but the new section 17(5) took effect on 1 Feb 2019, so rely on that date. |
| AARM/s AGS Health Pvt Ltd, Chennai (applicant)Tamil Nadu AAR, 4 Mar 2026Advance Ruling No. 18/ARA/2026 | Can an IT-enabled services company claim ITC on vehicles leased for staff transport in all shifts, going back to 01-02-2019?Only for vehicles carrying women employees who arrive or leave between 8 pm and 6 am, which Tamil Nadu law (government order no. 60 of 28-05-2019 under the Shops and Establishments Act) makes obligatory; not for other shifts or staff. ITC runs from 28-05-2019. The s.16(4) time limit still applies, so credit for past periods that has lapsed cannot be revived.“only on the tax paid on services of leasing, renting or hiring of motor vehicles for providing transport facilities to women employees”CGST Act s.17(5)(b) proviso; Circular 172/04/2022-GST; s.16(4)TN AAR ruling, official scanned PDF (GST Council)Patron Accounting summary (secondary) | Turns on its factsOnly the applicant and its jurisdictional tax officers (s.103).Same view as the Tamil Nadu AAR in Access Healthcare Services (2023). No appeal known. |
| AARM/s Juspay Technologies Pvt. Ltd. (Namma Yatri app)Karnataka AAR, 15 Sep 2023Advance Ruling No. KAR ADRG 31/2023 | Is a subscription-only ride app (no commission; auto drivers paid directly by riders) liable to pay GST on the rides under s.9(5)?No. The app is an e-commerce operator and an auto-rickshaw is a 'motorcab', but the rides are not supplied 'through' the app: it only connects driver and rider, does not collect fares and has no control over the ride. So it need not collect or pay GST on the rides.“merely connects the auto driver and passenger and their role ends on such connection”CGST Act s.9(5), s.104; Notif. 17/2017-CT(Rate)Ruling PDF, scanned (GST Council)GST Council AAR listing entryInc42 on the High Court stay of the AAR notice (secondary)Taxo on the AAR notice (secondary) | Rulings differOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereConflicts with the same authority's Opta Cabs ruling (2018). On 19 Jun 2025 the authority issued notice proposing to declare this ruling void; the Karnataka High Court reportedly stayed that notice (order not seen). |
| AARM/s Access Healthcare Services Pvt Ltd, Chennai (applicant)Tamil Nadu AAR, 15 Jun 2023Advance Ruling No. 14/ARA/2023 | Can a company claim ITC on cabs of under 13 seats hired to carry women staff at night, where state law makes that transport compulsory?Yes, but only for women employees arriving at or leaving work between 8 pm and 6 am, because the Tamil Nadu Shops and Establishments Act notification of 28-05-2019 makes that transport obligatory. ITC runs from 28-05-2019, not 01-02-2019, subject to the s.16 conditions. Transport for other staff stays blocked.“ITC is not blocked on the renting of motor vehicles to provide transport facilities to women employees working between 8.00 PM to 6.00 AM”CGST Act s.17(5)(b)(i) and proviso; Circular 172/04/2022-GST; Tamil Nadu Shops and Establishments Act 1947, notification dated 28-05-2019TN AAR ruling, official scanned PDF (GST Council)GST Council listing page | Turns on its factsOnly the applicant and its jurisdictional tax officers (s.103).No appeal found. The Tamil Nadu AAR took the same view in AGS Health (2026). |
| AARM/s Uttarakhand Public Financial Strengthening Project (recipient of motor vehicle hire from M/s Baba Tour & Travel and M/s Rajeshwari Travel)Uttarakhand AAR, 27 Mar 2023Advance Ruling No. 15/2022-23 (Application No. 11/2022-23) | When a monthly vehicle-hire contract bills a monthly rent plus night charges plus fuel by kilometres, is GST due on the whole bill or only on the monthly rent?GST is due on the whole bill: monthly rental plus night charges plus fuel on a mileage basis. The operator had to arrange fuel and maintenance, so any amount recovered under any head is extra consideration for the hire service under s.15.“Service provider has to charge GST on the whole amount of bill”CGST Act s.15(1)-(2); Notif. 11/2017-CT(Rate) S.No. 10(i)Ruling PDF (copy hosted by LiveLaw)LiveLaw Biz report (secondary) | ClarifiesOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereNone known. |
| AARNTL India Private LimitedTamil Nadu AAR, 30 Jun 2022Order No. 24/AAR/2022 | Must a company renting buses and cars with drivers (employee transport for clients such as Cognizant and India Yamaha) include toll charges it pays and recovers at actuals in its taxable value?Yes. Tolls are a cost the operator incurs so its own vehicles can run the service it sold, so their recovery is a reimbursement, not a pure-agent disbursement, and GST is payable on the whole value including tolls. The question whether the toll exemption passes to the operator was not admitted, as the operator is only a recipient of the toll service.“Reimbursement of such cost is no disbursement, but merely the recovery of a portion of the value of supply made to the recipients”CGST Act s.15(2)(c) (incidental expenses); CGST Rules r.33 (pure agent); Notif. 12/2017-CT(Rate) S.No. 23 (toll exemption)Ruling PDF, scanned (GST Council)GST Council AAR listing entryLiveLaw report (secondary) | ClarifiesOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereNone known. Contrast the Uttar Pradesh AAAR in Ion Trading (2020), where a cost passed on purely as the employees' agent had nil value; there the employees alone used the parking. |
| AARM/s New Pandian Travels Pvt Ltd, Chennai (applicant)Tamil Nadu AAR, 30 Nov 2021Order No. 43/AAR/2021 | Can a travel company claim ITC on cars of up to 13 seats that it rents with drivers to corporate clients, including SEZ units?No. Renting cars with drivers is neither a 'further supply of such motor vehicles' nor 'transportation of passengers', because the client's own transport team decides routes, pick-up points and who travels. The same applies to supplies to SEZ units under LUT.“the activity undertaken by the applicant is only renting/hiring of the Motor Vehicles with the operators and not undertaking transportation of passengers”CGST Act s.17(5)(a)(A) and (B); IGST Act s.16TN AAR ruling, official PDF (GST Council) | ClarifiesOnly the applicant and its jurisdictional tax officers (s.103).No appeal found. Same view as West Bengal AAR, Reesham Associates (2019). |
| AARMohana Ghosh, carrying on business under the trade name M/s Reesham AssociatesWest Bengal AAR, 25 Jun 201906/WBAAR/2019-20 dated 10-06-2019, rectified suo motu by 08/WBAAR/2019-20 dated 25-06-2019 (case WBAAR 09 of 2019, applied 28-03-2019) | Is renting cabs with drivers to institutions such as the West Bengal Postal Circle, billed for a fixed number of hours a month, passenger transport (SAC 9964) or renting of a motor vehicle (SAC 9966), and can GST paid on buying the cars be claimed as ITC?It is renting of a motor vehicle (SAC 9966), not passenger transport: the customer pays a fixed monthly amount for the right to use the car whether or not it moves, extra for holidays or extra hours, and kilometres count only to recover fuel. Because the supply is not transportation of passengers, GST paid on buying the cars is not available as ITC under s.17(5)(a).“the recipient is provided with the right to use the vehicle over a specified duration, whether he is a passenger or not”Notif. 11/2017-CT(Rate) S.No. 8 (heading 9964) and S.No. 10(i) (heading 9966); CGST Act s.17(5)(a) and (b)(i) as amended w.e.f. 01-02-2019Rectified ruling 08/WBAAR/2019-20 (GST Council)Original ruling 06/WBAAR/2019-20 (WB Commercial Taxes)StudyCafe report (secondary; quotes 'WBAAR 09 of 2019', which is the case number) | ClarifiesOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereNo appeal found. The authority corrected its own order on 25 Jun 2019, and some reports still quote the first version. The Tamil Nadu AAR took the same line in New Pandian Travels (2021); we found no ruling allowing this credit. |
| AARM/s Opta Cabs Private LimitedKarnataka AAR, 27 Jul 2018Advance Ruling No. KAR ADRG 14/2018 | If a taxi app charges drivers only a monthly usage fee, takes no commission, and riders pay drivers directly, must the app still pay GST on the rides under s.9(5)?Yes. The passenger transport is supplied to customers through the app, so the app is deemed the supplier and must pay GST on the amounts it bills on behalf of the taxi operators.“There is no doubt that the services of transportation of passengers is supplied to the consumers through the applicant”CGST Act s.9(5); Notif. 17/2017-CT(Rate) dated 28-06-2017Ruling PDF (GST Council) | Rulings differOnly the applicant and its jurisdictional tax officers (CGST Act s.103); persuasive elsewhereConflicts with the same authority's ruling for Juspay (Namma Yatri) in 2023, on a subscription app. |
SAC and HSN codes
The code you print on the invoice: SAC for a service, HSN for goods. Since 1 April 2021 an invoice must show at least 4 digits if last year’s turnover was up to ₹5 crore, and 6 digits above that. Descriptions follow the government’s classification of services.
| Code | What it is for | Covers | GST today |
|---|---|---|---|
| 996412SAC | Taxi and chauffeur-driven car hire, local | City trips, airport transfers, radio taxis, car-pooling | 5% or 18% |
| 996423SAC | Taxi between cities | Outstation trips by taxi | 5% or 18% |
| 996601SAC | Renting a car, bus or coach with driver | Car or bus at the customer's disposal for a period; the customer decides routes and timings | 5% or 18% |
| 996742SAC | Toll roads and bridges | What the toll plaza supplies | Exempt (12/2017 entry 23) |
| 996743SAC | Parking lots | Paid parking | 18% at private lots; exempt if run by the municipality itself |
| 998551SAC | Booking tickets and rental cars | Agent's service for air, rail, bus tickets and car rentals | 18% on the agent's fee |
Who it applies to
Reverse charge on cab hire needs all four of these at once:
- The service is renting a car or bus designed to carry passengers, with fuel in the price.
- The supplier is not a body corporate: for example a proprietor, an HUF, a partnership firm, a trust or a society. A private or public limited company is a body corporate, and so is an LLP.
- The customer is a body corporate located in India.
- The supplier’s invoice does not charge GST at the with-credit rate: 18% from 1 November 2026, 12% before that.
If the customer is an individual, a firm or a government office, this entry does not apply and the operator charges GST as usual. If the operator is a company, the entry does not apply either.
A PAN tells you most of this. Its fourth letter is C for a company and P for an individual. F covers both firms and LLPs, so for F check the constitution shown in the GST registration.
Three bills, worked through
Shree Travels, a proprietorship, rents an Innova with driver and fuel to a private limited company for a month at ₹60,000 in November 2026. Shree Travels is on the 5% option. Its invoice charges no GST and says the tax is payable by the recipient under reverse charge.
| Invoice value (no GST charged) | ₹60,000 |
| Reverse-charge GST the company pays in cash (5%) | ₹3,000 |
| Company's cost if it cannot take the credit | ₹63,000 |
The company reports the ₹3,000 in its GSTR-3B (table 3.1(d)). Whether it can then claim it back depends on its own business: a cab operator buying for its own customer can; most other companies cannot, because of section 17(5).
Same car, same company, but Shree Travels bills with 18% GST on forward charge.
| Until 31 Oct 2026 | From 1 Nov 2026 | |
|---|---|---|
| GST on the invoice (18%) | ₹10,800 | ₹10,800 |
| Company pays the operator | ₹70,800 | ₹70,800 |
| Reverse charge by the company as well? | Strictly, yes: ask your CA | No |
Between 22 September 2025 and 31 October 2026 the reverse-charge entry still excused only bills at 12%, so a strict reading put even 18% bills under reverse charge, on top of the ₹70,800. That looks unintended to us, since 18% replaced 12% as the with-credit option, but if you have such bills, ask your CA. From 1 November 2026 the entry excuses bills at 18%.
City Cabs Private Limited rents the same car to the same company. A company is a body corporate, so the reverse-charge entry never applies. City Cabs charges 5% or 18% on its own invoice.
| City Cabs at 5% | City Cabs at 18% | |
|---|---|---|
| Rent | ₹60,000 | ₹60,000 |
| GST charged by City Cabs | ₹3,000 | ₹10,800 |
| Company pays in total | ₹63,000 | ₹70,800 |
How the rule got here
July to October 2017. For a few months any registered business paid reverse charge on most purchases from unregistered suppliers, with a small daily exemption. That was suspended from 13 October 2017 and later limited to notified cases.
1 October 2019. Reverse charge on renting of motor vehicles to a body corporate arrived (Notification 22/2019). In its first form it applied when the supplier was on the 5% option.
31 December 2019. The entry was reworded to the form it still has (Notification 29/2019): it applies unless the supplier’s invoice charges central tax at 6% (12% in total). CBIC’s Circular 130/49/2019 says this wording also explains the period from 1 October 2019.
22 September 2025. The 12% option became 18%, but the reverse-charge entry kept its reference to 6%.
1 November 2026. Notification 08/2026 replaces 6% with 9%, so a bill at 18% is forward charge again.
Who does what: bills, returns and payment
The supplier. What the operator does depends on whether it is registered.
| Supplier | Registered supplier | Unregistered supplier |
|---|---|---|
| Its bill | A tax invoice with the usual details, saying the tax is payable on reverse charge (rule 46(p)). No set wording is prescribed. | No tax invoice. It must not collect any GST (section 32(1)); the company issues the invoice itself. |
| GST on the bill | None. Any amount collected as GST must still be paid to the government (section 76). | None. |
| Registration | Already registered. | Not needed if all its supplies are ones where the customer pays all the tax (Notification 5/2017-CT); a single forward-charge supply ends that relief. Otherwise the usual turnover limit applies. Supplies to another State are less clear (our reading). |
| Its returns | GSTR-1 Table 4B. No tax to pay on these in GSTR-3B; GSTN fills their value into Table 3.1(a), so check that no tax sits against them. | None. |
| On e-invoicing | Marks the e-invoice “Reverse charge: Y”. | Not applicable. |
| An advance | Receipt voucher, saying reverse charge applies (rule 50). | Not applicable. |
The company. It pays the tax either way, but its paperwork differs.
| Company | Supplier registered | Supplier unregistered |
|---|---|---|
| Invoice | Uses the supplier’s tax invoice. | Issues its own invoice: within 30 days of receiving the service since 1 Nov 2024 (rule 47A); no time limit was set before that. |
| Payment voucher | Issues one whenever it pays the supplier (rule 52). | The same. |
| When the tax is due | The earlier of the payment date and the 61st day after the supplier’s invoice. | Since 1 Nov 2024: the earlier of the payment date and the date of its own invoice. Before that, the earlier of payment and the 61st day after the supplier’s bill. |
| Paying the tax | In cash only: credit cannot pay reverse charge (sections 49(4) and 2(82)). | The same. |
| GSTR-3B | Table 3.1(d), pre-filled from GSTR-2B. | Table 3.1(d), entered by hand: it is not pre-filled. |
| Credit | Table 4(A)(3) after paying, once the invoice is in GSTR-2B, and only if not blocked by section 17(5). | Table 4(A)(3) after paying; GSTR-2B is not needed. The time limit runs from the year of its own invoice (Circular 211/5/2024). |
| IRN | Not needed for these. | From 1 Jan 2027, if it is on e-invoicing: an IRN on its own invoice, supply type RCMDOM. Imported services go as RCMIMP. |
Shree Travels, not registered, rents a car with driver and fuel to ABC Private Limited for March 2027 for ₹60,000. ABC pays on 20 April.
| Service received (the month ends) | 31 Mar 2027 |
| ABC's own invoice due by (30 days) | 30 Apr 2027 |
| ABC issues it (with an IRN, if on e-invoicing) | 15 Apr 2027 |
| ABC pays Shree Travels, with a payment voucher | 20 Apr 2027 |
| Tax due on the earlier of the two | 15 Apr 2027 |
| Reverse charge at 5%, paid in cash | ₹3,000 |
ABC reports the ₹3,000 by hand in Table 3.1(d) of its April GSTR-3B. It claims it back in Table 4(A)(3) only if its credit is not blocked: for most companies hiring cars for staff, it is.
More on e-invoicing dates in E-invoicing and GST returns, and on invoices and vouchers in GST invoices, advances and credit notes.
Common questions
I am a proprietor on the 5% option. Do I charge GST to a company customer?
For renting a car with driver and fuel, no. From 1 November 2026, unless you charge 18%, the company pays 5% under reverse charge. Your invoice should say that tax is payable by the recipient on reverse charge.
Is an LLP a body corporate for this rule?
Yes. An LLP is a body corporate, so an LLP operator is outside this entry and charges GST itself, and an LLP customer pays reverse charge on cab hire from a proprietor or firm.
What rate does the company pay under reverse charge?
5%, the rate for the without-credit option, split into CGST and SGST or charged as IGST depending on the place of supply.
A registered proprietor bills us under reverse charge. Do we issue a self-invoice?
No. You use its tax invoice, pay the tax in cash through GSTR-3B Table 3.1(d), and issue a payment voucher when you pay. A self-invoice is only for purchases from unregistered suppliers.
Can an unregistered cab owner who only rents cars to companies stay unregistered?
Yes, under Notification 5/2017-CT, as long as all its supplies are ones where the customer pays all the tax. A single supply on which it would have to charge GST itself, such as a trip for an individual, ends that relief. The notification names only the CGST Act's reverse-charge section, so for supplies to a customer in another State the position is less clear; that is our reading, so take advice.
Our company is on e-invoicing. Which reverse-charge purchases need an IRN from January 2027?
Self-invoices for reverse-charge purchases from unregistered persons (supply type RCMDOM) and for imported services (RCMIMP). Reverse-charge bills from registered suppliers do not need a self-invoice IRN.
Words used on this page
- GST option (5% or 18%)
- For cab hire with driver and fuel you choose 5% with almost no input credit, or 18% with full input credit. Until 21 Sep 2025 the second option was 12%.
- ITC (input tax credit)
- GST you paid on business purchases that you subtract from the GST you collect.
- Same line of business
- Buying the same kind of service you sell, such as cab hire bought from another operator.
- RCM (reverse charge)
- The customer pays the GST to the government instead of the supplier.
- Body corporate
- A company or an LLP. Proprietors, HUFs and partnership firms are not body corporates.
- SAC / HSN
- The code printed on an invoice for a service (SAC) or for goods (HSN).
- Place of supply
- The state whose GST applies. It decides whether you charge IGST or CGST plus SGST.
- E-invoice / IRN
- Reporting an invoice to the government portal, which returns an Invoice Reference Number and a QR code.
- Pure agent
- Someone who pays an expense on the customer's behalf, with its authority, and recovers it at actual cost.
- TDS
- Tax your customer cuts from a payment to you and deposits against your PAN. You claim it in your income tax return.
- TCS
- Tax a seller collects from the buyer on top of the price, such as on overseas tour packages.