Cab and taxi travel is a routine business expense, but it is only useful to your accounts if it comes with a correct GST invoice. A proper invoice lets you record the expense accurately, reconcile it in GSTR-2B, and claim input tax credit wherever your business is eligible. This guide covers what to look for, the rate that applies, and the reverse-charge and credit rules, all referenced to the standard CBIC positions.
What a GST-compliant cab invoice must contain
- Operator's legal name, address and GSTIN
- Unique invoice number and date of issue
- Customer's name, address and GSTIN (for B2B claims)
- SAC code 9964 (passenger transport services)
- Description of the trip and the taxable value
- GST rate and amount, split as CGST + SGST or IGST
- Place of supply (state)
- Signature or valid digital signature of the supplier
GST rate on cab & taxi services
Passenger transport falls under SAC 9964. Two rate options exist for renting a motor vehicle or a radio/app taxi:
| Rate | Input tax credit to the operator | Typical use |
|---|---|---|
| 5% | Not available to the operator | Most radio / app cab bookings |
| 12% | Available to the operator | Where the operator opts for forward charge with credit |
Rates are set by CBIC notifications and can change. Confirm the current rate printed on your invoice.
Reverse charge (RCM) on renting motor vehicles
For renting of a motor vehicle designed to carry passengers, with the cost of fuel included, a specific reverse-charge rule applies. When the supplier is not a body corporate and does not charge 12%, and the recipient is a body corporate, the recipient pays the 5% GST directly to the government under RCM rather than to the supplier. If the supplier bills 12% under forward charge, RCM does not apply and the supplier collects the tax as usual. Knowing which applies matters for how your company records and pays the tax.
Can your business claim input tax credit?
This is where most companies over-claim. Under Section 17(5)(b) of the CGST Act, input tax credit on hiring or renting motor vehicles for the transport of persons (seating capacity up to 13, including the driver) is blocked, with limited exceptions:
- Where you supply the same category of service onward (for example, you are yourself a cab or travel operator).
- Where the vehicle is used for further supply of such vehicles.
- Where providing the transport to employees is obligatory under a law in force at the time.
Outside these cases, the GST on employee cab expenses is usually a cost, not a credit. Because eligibility turns on your exact facts, treat this as general guidance and confirm your position with your tax advisor.
Get GST invoices for your corporate travel
Pulpit bills every corporate booking with a proper GST invoice, our GSTIN, SAC 9964, the taxable value and the GST charged, plus monthly consolidated statements your finance team can reconcile in one place. Employee transport, airport transfers and monthly contracts across Ahmedabad, Gujarat and pan-India.
Explore corporate cab serviceFrequently asked questions
What is the SAC code for cab and taxi services?
Passenger transport services fall under SAC 9964. A GST-compliant cab invoice should carry this code so the expense is classified correctly in your books and in GSTR-2B.
What GST rate applies to cab and taxi bookings?
Passenger transport by a radio taxi or a rented motor vehicle is generally taxed at 5% GST where the operator does not claim input tax credit, or 12% where the operator does. Most cab operators bill at 5%. Rates are set by CBIC notifications and can change, so confirm the current rate on your invoice.
When is GST on a cab booking payable under reverse charge (RCM)?
Under the reverse-charge notifications for renting of motor vehicles designed to carry passengers (with fuel cost included), when the supplier is not a body corporate and does not charge 12%, and the recipient is a body corporate, the recipient pays the 5% GST directly to the government under RCM. If the supplier charges 12% under forward charge, RCM does not apply.
Can a business claim input tax credit (ITC) on cab expenses?
ITC on hiring or renting motor vehicles for transport of persons (seating up to 13, including the driver) is blocked under Section 17(5)(b) of the CGST Act, with exceptions, for example where you supply the same category of service onward, or where providing the transport to employees is obligatory under a law in force. Eligibility depends on your specific case, so confirm with your tax advisor.
What must a GST-compliant cab invoice contain?
As per Rule 46, it should show the operator's name, address and GSTIN, a unique invoice number and date, the customer's name, address and GSTIN (for B2B), the SAC code (9964), the description and taxable value, the GST rate and amount split into CGST and SGST or IGST, the place of supply, and a signature or digital signature.
Does Pulpit provide GST invoices for corporate travel?
Yes. Corporate bookings are billed with a proper GST invoice carrying our GSTIN, SAC 9964, the taxable value and the GST charged, plus monthly consolidated statements for easy reconciliation. Speak to our corporate desk to set up GST billing for your company.
This guide is general information, not tax or legal advice. GST rates, notifications and credit rules change over time and depend on your specific facts. Verify the current position with your chartered accountant or the latest CBIC notifications before acting.
