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Microlesson · 5-min read

Passenger Transportation Services Exemptions

# Passenger Transportation — GST Exemptions

## Air Travel

ModeStatus
Air travel in economy class from / to airports in NE States, Bagdogra (West Bengal)Exempt
Air travel — other economy / business classTaxable

Note: Booking the service via an agent does not change the exemption — the underlying transportation remains exempt; the agent's commission, however, is taxable.

## Non-AC Contract Carriage

Transport of passengers by non-air-conditioned contract carriage other than:

  • Radio taxi
  • Tourism, conducted tour, charter or hire

Exempt

Always taxable:

  • AC contract carriage
  • Radio taxi (always taxable)
  • Tourism / Conducted tour / Charter / Hire (always taxable)

## Stage Carriage

  • Non-AC stage carriage → Exempt
  • AC stage carriage → Taxable (exemption does not apply if booked through ECO under Section 9(5))

## Funding under RCS (Regional Connectivity Scheme)

Viability gap funding received by airline operators under RCS — Exempt for 3 years from the date of commencement of operations.

## Other Modes of Transport

Transportation of passengers (with or without accompanied belongings) by:

ModeStatus
Railway / Monorail / Tramway (Non-AC)Exempt
MetroExempt
Inland waterwaysExempt
Public transport in a vessel (not tourism)Exempt
Metered cabs, auto-rickshaws (including e-rickshaw)Exempt (if not booked through ECO)
Leisure / charter vessels / cruise shipTaxable
Ropeway, cable car, aerial tramwayTaxable

## ECO (Electronic Commerce Operator) Twist

When specified services like auto-rickshaw rides or non-AC stage carriages are supplied through an ECO (e.g. Uber, Ola), Section 9(5) liability arises on the ECO and the original exemption does NOT apply.

Worked example

### Example 1

Example 1: Mr. A books an economy class flight from Guwahati to Mumbai. Answer: Departure from NE State (Guwahati) in economy class — Exempt.

### Example 2

Example 2: A non-AC stage carriage bus ferries passengers from Delhi to Jaipur. Answer: Exempt.

### Example 3

Example 3: An auto-rickshaw ride booked through Uber. Answer: Auto ride is normally exempt, but when supplied through ECO under Sec 9(5), exemption does NOT apply — Uber pays GST.

### Example 4

Example 4: A radio taxi service. Answer: Always taxable regardless of AC/non-AC.

### Example 5

Example 5: A cruise ship from Mumbai to Goa for leisure. Answer: Taxable — leisure/charter/cruise ships are specifically excluded from exemption.

⚠️ Common exam mistakes

  • Assuming all economy class air travel is exempt — only travel from/to NE States and Bagdogra is exempt.
  • Treating all auto-rickshaw rides as exempt — when booked through ECO under Sec 9(5), exemption fails.
  • Treating radio taxi as exempt if non-AC — radio taxi is ALWAYS taxable.
  • Confusing contract carriage exemption — only non-AC contract carriage is exempt, and even that excludes tourism/charter/hire.
  • Forgetting that air travel BOOKING service (by agent) is taxable, even if the underlying transport is exempt.
Bare-Act text Entry 15 & 17 · Notification No. 12/2017-CT(R) dated 28.06.2017 · click to expand
Service of transportation of passengers, with or without accompanied belongings, by — (a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal; (b) non-air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; (c) stage carriage other than air-conditioned stage carriage; — is exempt.
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