Services taxed at 5%
The merit rate, and the busiest concessional band in the services schedule. Transport, restaurants, budget hotels, tour operators, most job work, beauty and wellness, and several rail and air fares sit here.
39 entries of the GST rate schedule for services are taxed at 5%, spread across 14 headings of Chapter 99. 76 service codes normally fall at this rate.
- Schedule entries39
- Headings14
- Service codes76
Not sure your service belongs at this rate?An IncorpX GST advisor will check it, freeWhat the schedule taxes at 5%
Every entry at this rate, grouped by the heading it is written under. The credit condition sits with each entry, because at a concessional rate it usually decides whether the rate is worth taking.
Hotel accommodation where the value of supply of a unit of accommodation is up to Rs. 7,500 per unit per day, or equivalent.
No input tax credit Input tax credit on goods and services used in supplying the service cannot be taken.Restaurant service supplied at premises other than specified premises.
No input tax credit Specified premises are, broadly, premises from which hotel accommodation was supplied above Rs. 7,500 per unit per day in the preceding financial year, or premises for which the supplier has filed a declaration opting in.Supply of food, drink or other article for human consumption by Indian Railways, the IRCTC or their licensees, on trains or at platforms.
No input tax creditOutdoor catering supplied at premises other than specified premises, by a person other than one supplying hotel accommodation above Rs. 7,500 per unit per day.
No input tax creditA composite supply of outdoor catering together with renting of the premises, at premises other than specified premises.
No input tax creditTransport of passengers by rail in first class or in an air-conditioned coach.
Restricted credit Credit of input tax charged on goods used in supplying the service is not available.Transport of passengers by an air-conditioned contract carriage, an air-conditioned stage carriage or a radio taxi.
No input tax creditTransport of passengers by air in economy class.
Restricted credit Credit of input tax charged on goods used in supplying the service is not available.Transport of passengers by air, embarking from or terminating at a Regional Connectivity Scheme airport, against viability gap funding.
Restricted credit The concession runs for one year from the date of commencement of operations of the airport as notified by the Ministry of Civil Aviation.Transport of passengers by air in a non-scheduled or charter operation for a religious pilgrimage facilitated by the Government of India under a bilateral arrangement.
Restricted creditTransport of passengers by helicopter on a seat-share basis.
Restricted credit Charter of the whole helicopter is taxed at the standard rate.Transport of passengers by any motor vehicle where the cost of fuel is included in the consideration charged.
Restricted credit At 5% only credit of input services in the same line of business may be taken. The supplier may instead charge 18% with full credit.Transport of passengers by ropeway.
Restricted credit Credit of input tax charged on goods used in supplying the service is not available.Transport of goods by rail, other than in containers by a person other than Indian Railways.
Restricted credit Credit of input tax charged on goods is not available.Transport of goods in a vessel.
Restricted credit Credit of input tax charged on goods other than ships, vessels including bulk carriers and tankers is not available.Services supplied by a Goods Transport Agency in relation to transport of goods, including used household goods for personal use.
No input tax credit A GTA may instead opt to pay 18% with full input tax credit under the forward charge, by filing the prescribed declaration for the financial year.Transport of goods in containers by rail, by a person other than Indian Railways.
No input tax credit The supplier may instead charge 18% with full input tax credit.Transport of petroleum crude, motor spirit, high speed diesel, natural gas or aviation turbine fuel through a pipeline.
No input tax credit The supplier may instead charge 18% with full input tax credit.Multimodal transportation of goods within India, where no leg of the journey is by air.
Restricted credit Credit is limited: input tax credit on input services of transportation of goods may be taken only up to 5% of the value.Transport of goods by ropeway.
Restricted credit Credit of input tax charged on goods is not available.Renting of a motor vehicle designed to carry passengers, where the cost of fuel is included in the consideration charged.
Restricted credit At 5% only credit of input services in the same line of business may be taken. The supplier may instead charge 18% with full credit.Renting of a goods carriage where the cost of fuel is included in the consideration charged.
Restricted credit The supplier may instead charge 18% with full input tax credit.Time charter of a vessel for the transport of goods.
Restricted credit Credit of input tax charged on goods other than ships, vessels including bulk carriers and tankers is not available.Services of third party insurance of goods carriage.
Credit availableSelling of space for advertisement in print media.
Credit available Advertising in any other medium, including digital, is taxed at the standard rate.Supply of an electronic book, that is the electronic version of a printed book falling under tariff item 4901 of the Customs Tariff, supplied online.
Credit availableServices by a tour operator, where the consideration charged covers the whole tour package.
Restricted credit Credit may be taken only of input services of another tour operator. The supplier may instead charge 18% with full credit.Housekeeping services such as plumbing and carpentry, supplied through an electronic commerce operator by a person who is not liable to register for GST.
No input tax credit The electronic commerce operator is liable to pay the tax on these supplies.Housekeeping services such as plumbing and carpentry, supplied through an electronic commerce operator by a person who is not liable to register for GST.
No input tax creditMaintenance, repair or overhaul services in respect of aircraft, aircraft engines and other aircraft components or parts.
Credit availableMaintenance, repair or overhaul services in respect of ships and other vessels, their engines and other components or parts.
Credit availableJob work in relation to specified goods: food and food products of Chapters 1 to 22, products of Chapter 23 other than dog and cat food, pharmaceutical products of Chapter 30, hides, skins and leather of Chapter 41, printing of newspapers and books, specified printed goods of Chapters 48 and 49, textiles and textile products of Chapters 50 to 63, bricks, goods of Chapter 71 other than diamonds, handicrafts and umbrellas.
Credit availableAny treatment or process carried out on goods belonging to another person, in relation to printing of newspapers and books and specified printed goods of Chapters 48 and 49.
Credit availableServices by a clinical establishment by way of providing a room, other than an Intensive Care Unit, Critical Care Unit, Intensive Cardiac Care Unit or Neo natal Intensive Care Unit, where the room charge exceeds Rs. 5,000 per day.
No input tax credit This is a narrow exception to the health care exemption: the room charge is taxed, while the treatment itself stays exempt.Treatment of effluents by a Common Effluent Treatment Plant.
Credit available Reduced from 12% with effect from 22 September 2025.Treatment or disposal of bio-medical waste, or processes incidental to it, by a common bio-medical waste treatment facility supplied to a clinical establishment.
Credit available Reduced from 12% with effect from 22 September 2025.Services by way of admission to the exhibition of cinematograph films where the price of admission is one hundred rupees or less.
Credit availableBeauty and physical well-being services, including hairdressing, barbers, cosmetic treatment, manicuring, pedicuring, health clubs, fitness centres, salons, spas and yoga.
No input tax credit Reduced from 18% to 5% without input tax credit with effect from 22 September 2025.Rates shown here are as published in GST rates on services, Notification 11/2017-Central Tax (Rate) as amended up to Notification 15/2025-Central Tax (Rate) and are reproduced for reference. The GST Council revises rates through notifications, including the rate rationalisation effective 22.09.2025 that withdrew the 12% and 28% slabs for most services and introduced a 40% rate for a short list of them. Always verify the current rate and the conditions attached to it on the CBIC GST rates page or the CBIC tax information portal before invoicing or filing. Rates exclude any applicable cess. IncorpX provides assistance for GST registration and return filing if you need help.
76 SAC codes normally taxed at 5%
Codes whose usual treatment is this rate. A supply under any of them can still fall under a different entry, so open the code to read the full set.
- Classification: Scheme of Classification of Services, Annexure to Notification 11/2017-Central Tax (Rate), Central Board of Indirect Taxes and Customs (cbic-gst.gov.in).
- Rates: GST rates on services, Notification 11/2017-Central Tax (Rate) as amended up to Notification 15/2025-Central Tax (Rate) (CBIC rate finder).
- Exemptions: Exempt services, Notification 12/2017-Central Tax (Rate) as amended up to Notification 16/2025-Central Tax (Rate).
- Reverse charge: Services taxable under reverse charge, Notification 13/2017-Central Tax (Rate) as amended.
- Current position: GST Council notifications published on the CBIC tax information portal.
This directory reproduces government classifications and rate entries for reference. The official gazette and CBIC notifications remain the authoritative sources. IncorpX provides assistance for registrations and filings that use these codes and does not issue the classification or the rates itself.
Guides and resources
How the rate you land on plays out in your invoices and returns.
5% GST questions
Which services are taxed at 5% under GST?
39 entries of the GST rate schedule for services are taxed at 5%, spread across 14 headings of Chapter 99. 76 service codes normally fall at this rate. Read the credit column before you celebrate. Most 5% entries are conditional on not taking input tax credit on the goods and services used to supply them, which is the trade the concession is built on. A few entries let the supplier opt for the standard rate with full credit instead, and for some businesses that is the cheaper choice overall.
Do I get input tax credit at 5%?
Usually not in full. Most entries at this rate are conditional on not taking input tax credit on the goods and services used to supply them, or restrict it in the way the annexure sets out. Each entry on this page shows its own credit condition.
How is 5% split between CGST and SGST?
For a supply within one state the rate splits equally: 2.5% CGST and 2.5% SGST or UTGST. For a supply between states the whole 5% is charged as IGST instead.
Did this rate change on 22 September 2025?
The 56th GST Council rationalised the slab structure with effect from 22 September 2025. For services it withdrew 12% and 28% in most places, created a 40% demerit rate, moved several concessional entries such as works contracts for government bodies up to 18%, and cut beauty and physical well-being services and effluent and bio-medical waste treatment down to 5%. Always verify the current position on the CBIC portal before invoicing.
Not sure this is the right rate for your services?
Tell us what you actually supply and an IncorpX advisor will help you confirm the SAC code, the rate that applies to it and whether reverse charge is in play, before you invoice or file. Free, with no obligation. IncorpX provides assistance for GST registration and return filing; applications are always filed in your name with the tax authorities.
Nebin Binoy 
