Hotels, restaurants, caterers, EV transport and delivery: new GST options from 1 November 2026

Notification 06/2026-Central Tax (Rate), with matching state and IGST notifications, changes the services rate schedule from 1 November 2026.

• Hotels, restaurants and catering at 5%. The rate stays 5%, but credit is now allowed on inputs and services from the same line of business. For hotels, outdoor catering and EVs, that credit is capped at 2.5% (central tax) when the supplier charged more: on a ₹10,000 room bought from a hotel charging 9% CGST (₹900), only ₹250 can be claimed.
• Electric vehicles. Passenger transport by electric vehicle, and renting electric vehicles with charging, can be charged at 5% with same-line credit, or at 18% with full credit.
• Delivery through e-commerce operators. Delivery services other than postal and courier supplied through an e-commerce operator are taxed at 5% without credit, and the operator pays the tax (Notification 09/2026-Central Tax (Rate)), unless the delivery provider must register in its own right.
• Cab hire with fuel to a company. Reverse charge now applies unless the supplier charges CGST at 9% (earlier 6%) (Notification 08/2026-Central Tax (Rate)).
• Other rate changes. Retreaded tractor tyres move from 18% to 5%; psyllium (isabgol) seeds become exempt.

What to do Copy link

Hotels and restaurants should list which purchases are “same line” (for example rooms or food bought from another hotel or caterer) before claiming credit, and apply the 2.5% cap. For a sale that straddles 1 November, the rate depends on which two of supply, invoice and payment fall on the same side of the date (section 14).

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