The Government has issued Notification No. 08/2026-Central Tax (Rate) in October 2026, increasing the GST rate payable under reverse charge on renting of motor vehicles from 6% to 9%.
Registered businesses that pay GST under reverse charge on hiring motor vehicles are affected, as are vehicle rental operators who supply such services to them, since invoices and tax workings will need to reflect the higher rate.
What to do: check the date from which the revised rate applies, update the reverse charge rate in accounting and billing systems, and review open contracts for vehicle hire.
