Introduction
Transport charges are commonly added in mostly business invoices, but many people are confused about the correct HSN code for transport charges, applicable GST rates, and whether Reverse Charge Mechanism (RCM) applies.
In this blog we will explains everything about transport charges HSN code, SAC codes, latest GST rates (2025), exemptions, and invoice rules in simple language for Indian businesses.
What Is Transport Charges HSN Code?
HSN vs SAC Under GST
Under GST law:
HSN (Harmonized System of Nomenclature) is used for goods
SAC (Service Accounting Code) is used for services
👉 Since transport charges are a service, they fall under SAC codes, not goods HSN codes.
Correct HSN / SAC Code for Transport Charges
Transport Charges SAC Codes List
| Transport Service | SAC Code |
|---|---|
| Road transport of goods (GTA) | 996511 |
| Rail freight transport | 996512 |
| Air cargo transport | 996513 |
| Sea / Inland water transport | 996521 / 996522 |
| Courier services | 996812 |
👉 Most commonly used transport charges HSN code = SAC 996511
GST Rate on Transport Charges (Latest 2026)
GST Rates on Goods Transportation
After 22 September 2025, the 12% GST slab is removed, and transport services are taxed mainly at 5% or 18%.
| Transport Type | GST Rate | Notes |
|---|---|---|
| GTA (Road) – RCM | 5% | No ITC |
| GTA – Forward Charge | 18% | ITC available |
| Rail freight | 5% | Limited exemptions |
| Inland water transport | 5% | Essential goods exempt |
| Air cargo | 18% | Limited exemptions |
| Courier services | 18% | No exemption |
What Is GTA in Transport Charges?
Meaning of Goods Transport Agency
A Goods Transport Agency (GTA) is a transporter who issues a consignment note.
Consignment note issued → GST applicable
No consignment note → GST exempt
Reverse Charge Mechanism (RCM) on Transport Charges
When Does RCM Apply?
RCM applies when transport service is provided to:
Registered company
Factory
Partnership firm / LLP
Registered business entity
👉 GST Rate under RCM: 5% (No ITC)
Transport Charges Exempt from GST
GST Exemption Cases
Transport charges are GST exempt in these cases:
Agricultural produce
Milk, salt, food grains
Newspapers and magazines
Individual truck owner (non-GTA)
Government-notified essential goods
Transport Charges HSN Code for Passenger Transport
Passenger Transport SAC Codes
| Passenger Transport | SAC Code | GST Rate |
|---|---|---|
| Non-AC public transport | 996411 | 0% |
| AC rail / metro | 996411 | 5% |
| Air travel (Economy) | 996425 | 5% |
| Air travel (Business) | 996426 | 18% |
| Cab aggregators | 996411 | 5% |
Frequently Asked Questions (Q&A Section)
What is the HSN code for transport charges?
Transport charges fall under SAC 996511 for road transportation of goods.
Is GST applicable on transport charges?
Yes, GST applies if the transporter is a GTA and issues a consignment note.
What GST rate applies to transport charges in 2026?
Transport charges attract 5% GST under RCM or 18% under forward charge, depending on the option chosen.
Are transport charges exempt from GST?
Yes, transport of agricultural produce, food grains, newspapers, and non-GTA transport is exempt.
Is RCM compulsory on transport charges?
RCM is compulsory when GTA provides service to registered business entities.
Conclusion
Understanding the transport charges HSN code is essential for correct GST billing.
In most cases, SAC 996511 is used with 5% GST under RCM or 18% under forward charge.
Correct usage ensures GST compliance and avoids penalties.
Read more Transport related news here.