A self-drive car rental business leases cars without a driver, which falls under SAC 997311 for rental of transport equipment without operator. GST on such rental follows the rate of the car itself, so a small car rents at 18% while a large SUV or sedan rents at 40% from 22 September 2025. The invoice must show the car model and its category, rental period in hours or days, kilometre allowance and excess, fuel policy, and the refundable security deposit kept separate from the taxable rent.
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Self-drive rent, hatchback (petrol 1197 cc, under 4 m), 3 days
997311
3 DAY
1,800.00
5,400.00
18%
Self-drive rent, premium SUV (diesel 2184 cc, over 4 m), 2 days
997311
2 DAY
5,500.00
11,000.00
40%
Excess kilometres beyond plan, hatchback
997311
120 KM
9.00
1,080.00
18%
Late return charge, SUV (4 hours)
997311
4 HOUR
350.00
1,400.00
40%
Fuel shortfall charge, hatchback
997311
1 LOT
600.00
600.00
18%
Taxable value
₹19,480.00
GST (CGST + SGST, or IGST if inter-state)
₹6,234.40
Invoice total
₹25,714.40
Sample prices are illustrative. Check the GST rate for your exact item or service before billing.
Extra fields a self-drive car rental invoice needs
Car model with engine capacity and length category
Because rental without operator takes the rate of the car, the bill must show whether the vehicle is a small car (petrol up to 1200 cc or diesel up to 1500 cc, under 4 metres) or a larger car, which decides 18% or 40%.
Pickup and return date and time
Self-drive rentals are priced by the hour or by the day. Exact times explain late return fees and protect against disputes over an extra day charged.
Kilometre allowance and excess km
Plans include a fixed number of kilometres. Opening and closing odometer readings and the excess rate printed on the bill make overage charges transparent.
Refundable security deposit
Deposits held against damage are not consideration while they remain refundable. Show the deposit and its refund separately so it is not taxed unless it is forfeited.
Driving licence number of the renter
Rental companies must verify the licence before handing over a car. Recording the number on the rental bill links the rental to the person responsible for traffic fines.
Damage, fuel and late return charges
Charges for scratches, fuel shortfall or late return are part of the rental consideration. Itemise them so they carry the same rate as the car rent.
Standard GST invoice fields
Rule 46 of the CGST Rules applies to every tax invoice, including this one:
✓Supplier name, address and GSTIN
✓Consecutive invoice number (max 16 characters, unique for the year)
Rental without operator follows the rate of the car
Under the services rate notification, leasing or rental services without operator are taxed at the same rate as applies to the supply of like goods involving transfer of title. The 56th GST Council therefore moved rental of goods attracting 40% from 28% to 40%. For a self-drive fleet, this means small petrol and diesel cars within the 4-metre and engine limits rent at 18%, while mid-size and large cars, and SUVs over the specified limits, rent at 40%. Each invoice line must use the rate of the specific car, not one rate for the fleet.
Mixed fleets need line-wise rates
A customer who rents a hatchback for a week and an SUV for a weekend gets two different rates on one invoice. Your billing software should hold the car category in the vehicle master so the right rate flows to each rental line, including extras like excess kilometres or late return for that car. Using the lower rate on a large SUV is a direct tax shortfall that the business itself has to make good.
Deposits, damage recovery and traffic fines
A refundable deposit is not consideration while held. When part of it is retained for damage, that amount becomes consideration for the rental and needs tax at the car's rate, ideally through a separate invoice or debit note. Traffic challans paid on behalf of a renter and recovered at actual cost can be shown as reimbursement, but administrative fees added for handling them are taxable.
Input credit on cars bought for renting
Section 17(5) blocks credit on motor vehicles for carrying up to 13 persons, but it allows credit when the vehicles are used for further supply of such vehicles or for transport of passengers. Rental companies should take professional advice on whether self-drive leasing qualifies in their facts, because the credit question on fleet purchases is often the largest tax item in this business.
Common billing mistakes
✕Charging 18% on every car in the fleet, including large SUVs that rent at 40% from 22 September 2025.
✕Charging GST on the full security deposit at pickup, then struggling to reverse it when the deposit is refunded.
✕Treating fuel shortfall and late return fees as non-taxable penalties instead of part of the rent.
✕Billing a self-drive rental as cab service at 5%, even though no driver or operator is supplied.
Self-Drive Car Rental GST invoice: FAQ
What is the GST rate on self-drive car rental?
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Self-drive rental without operator is taxed at the rate applicable to the car itself. Small cars within the 1200 cc petrol or 1500 cc diesel and 4-metre limits attract 18%, while larger cars and SUVs above those limits attract 40% from 22 September 2025.
Which SAC applies to self-drive car rental?
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Leasing or rental of transport equipment without operator falls under SAC 997311 in the explanatory notes. Car hire with a driver is a different service, classified under 996601 or 996412 depending on how it is provided.
Is GST charged on the security deposit?
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Not while the deposit is refundable and held as security. If any part is adjusted against damage, fuel or late charges, that part becomes consideration and GST is charged on it at the rate applicable to the rented car.
Does a self-drive rental company need a separate invoice for each car?
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No, one invoice can cover several cars, but each car should be a separate line with its own rate, rental period and kilometre details, because cars in different size categories carry different GST rates.