Passengers Transport Services GST rate and SAC Code 9964 The Goods and Services Tax (GST) has made indirect taxation in India easier to understand and covers services like passenger transport. Those engaged in the passenger transport business, such as consumers, businessmen, and taxpayers, should know the applicable GST rates and SAC Code 9964. This article covers the provisions of the GST concerning SAC Code 9964 and what it means for the transport business. What is SAC Code for 9964? SAC Code 9964 is the code given to Passenger transportation services, which is further divided into classifying categories based on the method of transportation such as rail, road, waterways, and many more. The GST Council issues a particular SAC (Services Accounting Code) code to allocate and systemize the different services under the GST system.
Breakdown of SAC Code 9964 Categories SAC Code 9964 is further divided into subcategories for specific passenger transport services:
HSN Code Service Description 996411 Local transport and sightseeing services. 996412 Long-distance transport services by road. 996413 Transport services by rail. 996414 Transport services by air. 996415 Transport services by waterways. 996416 Other passenger transport services are not elsewhere classified.
These subcategories help service providers identify the exact classification of their services under GST.
GST Rates for Passenger Transport Services Passenger transport services are subject to varying GST rates based on the mode of transport and the nature of the service. Below is an overview of the GST rates for different categories under SAC Code 9964:
Category Service Type GST Rate Input Tax Credit (ITC) Road Transport Services Buses (Government or Public Sector) Exempt Not Applicable AC Buses or Private Operators 5% Without ITC Non-AC Buses Exempt Not Applicable Rail Transport Services First Class or AC Coaches 5% Without ITC Sleeper Class or Unreserved Coaches Exempt Not Applicable Air Transport Services Economy Class 5% Without ITC Business Class 12% With ITC Waterways Transport Services Cruises or Luxury Boats 18% With ITC Ferry Services Exempt Not Applicable Miscellaneous Services Tour Packages or Sightseeing 5% Without ITC Other Passenger Transport Services Applicable rates based on service type Varies
Exemptions Under SAC Code 9964 To keep bus fares affordable and boost public transport usage, certain public passenger transport services enjoy GST exemption:
1. State and Government-Owned Buses: Applies to non-AC buses only.
2. Rail Transport Services: Exemption is provided for unreserved and sleeper class train tickets.
3. Non-Luxury Ferry Services: Ferry services that serve the general public are not subject to GST.
4. Religious Pilgrimage Transport: Government scheme-approved services for pilgrimage are exempt from GST.
GST Compliance for Passenger Transport Services The providers of passenger transport services are required to comply with the requirements of GST to prevent incurring fines and for easier business transactions. Some of the essential requirements are:
1. GST Registration: This is needed for all companies which have a turnover of more than ₹20 lakh (₹10 lakh in special category states).
2. Invoicing: GST invoices need to be properly issued and SAC Code 9964 together with the GST rate must be included.
3. Filing GST Returns: GSTR-1 and GSTR-3B, along with all other returns relevant to the business, should be filed within the prescribed deadlines.
4. ITC Utilisation: Knowing the conditions for the usage of ITC is important as there are several services where ITC cannot be claimed.
Impact of GST on Passenger Transport Services The incorporation of GST has made it easier to quantify passenger transport services. Here are some main impacts.
1. Standardized GST: The standard GST rate replaced various indirect taxes such as service tax, VAT, entertainment tax , etc.
2. Lower Costs: Non-AC and public transport services as well as exemptions ensure affordability for the common man.
3. Greater Clarity: SAC codes such as 9964 have greatly improved clarity on what classifications and tax rates are applicable.
4. Availability of ITC: Service providers of taxable services are in the good fortune of being able to claim ITC, which overall reduces the tax burden.
Challenges Faced by the Industry Even after acknowledging the benefits, issues still exist for the passenger transport industry under the GST:
1. Difficult Following ITC Rules: There is uncertainty among transport service providers due to limited ITC being available for certain services.
2. High Compliance Requirements: Keeping records and filing returns is an issue for small transport operators.
3. Lack of Clarity in Services Classification: Improper classification of services leads to penalties.
4. Increased Expenses: Ticket prices rise due to higher GST rates on luxury services.
Conclusion It is crucial to grasp the necessary details about the GST rate and Code 9964, especially for transport service providers and their clients. The framework of the GST system eliminates tax compliance headaches, makes public transport cheaper, and increases accountability. Nevertheless, these bottlenecks in the compliance effort and lack of available ITC must be dealt with to encourage the growth of the industry.
When it comes to transport services, there are a lot of tips and information businesses need to pay attention to such as how best to make use of the available exemptions. We shall be glad to provide additional information that will assist in their day-to-day activities.
FAQs 1. What is SAC 996421? SAC 996421 is a Service Accounting Code used for ‘Passenger transportation services by road other than by railways’ which refers to the passenger transport services that use buses or motor vehicles, but not trains
2. What does the SAC number on a train ticket represent? The SAC number found on a train ticket is a Service Accounting Code used for accounting of services during the GST regime, for example, railways freight transport.
3. What is the HSN code for transport services? The HSN code for transport services varies depending on how the services are provided. For general road transport of passengers, the SAC code is 996421.
4. What is the HSN code for transportation services by road? SAC 996421 is the code for transportation services by road for passengers. Whereas for goods it depends on the service provided.
5. Are transportation of passengers by air exempt from GST? Under specific criteria, such as economic class, there are certain exceptions which allow for GST exemption but for the most part air passenger transport is not completely free from GST.
People Also Ask Q1: What is SAC Code 9964 under GST? SAC Code 9964 refers to Passenger Transport Services and includes road, rail, water, and air transport categories, helping classify services under GST for proper tax compliance.
Q2: What is the GST rate on passenger transport services? GST on passenger transport services varies. Non-AC public buses, unreserved train tickets, and ferry services are exempt , while air-conditioned buses, cabs, and luxury services generally attract 5% or 12% GST depending on ITC eligibility.
Q3: Is GST applicable on bus tickets? Yes, GST applies to AC buses and private passenger transport services under SAC 996421, while non-AC government buses are exempt to keep fares affordable.
Q4: Are train tickets taxable under GST? Yes, GST is applicable to AC train tickets and first-class tickets at 5%, whereas unreserved and sleeper class tickets are exempt.
Q5: How does GST impact passenger transport fares? GST has standardized taxation, replacing multiple state taxes. It reduced costs for exempt services but slightly increased fares for luxury and AC transport due to higher tax rates.
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