GST Notification No 06/2026-CTR

The Central Government, on the recommendations of the GST Council, has amended Notification No. 11/2017-Central Tax (Rate), dated 28 June 2017, under Sections 9(1), 9(3), 9(4), 11(1), 15(5), 16(1) and 148 of the CGST Act, 2017. The amendments revise the conditions for claiming Input Tax Credit (ITC) on certain services covered under Serial No. 7 and introduce additional provisions under Serial No. 8. These changes will be effective from 1 November 2026.

Hotel Accommodation Services – (Serial No. 7(i) of Notification No 11/2017-CTR)

• For hotel accommodation services taxable at 2.5% CGST, ITC on goods and services used for providing such services will not be available. However, ITC will be allowed on hotel accommodation services procured from another hotel accommodation service provider, being services in the same line of business.
• Where the other hotel accommodation service provider charges CGST at a rate higher than 2.5%, the recipient can claim ITC only up to 2.5% of the value of such input service. Any excess ITC will not be available.

Illustration: A customer (A) books hotel accommodation from B for ₹7,000 per unit per day. B purchases hotel accommodation services from C for ₹10,000 per unit per day, on which C charges CGST at 9%, amounting to ₹900. Since B charges CGST at 2.5% to A, B can claim ITC of only ₹250 (2.5% of ₹10,000) instead of ₹900.

Restaurant Services – (Serial No. 7(ii) of Notification No 11/2017-CTR)

• For restaurant services provided at premises other than specified premises, ITC on goods and services used for providing such services will not be available. However, ITC will be allowed on restaurant services procured from another restaurant service provider operating at premises other than specified premises, as these are services in the same line of business.

Food and Beverage Services by Indian Railways or IRCTC – (Serial No. 7(iii) of Notification No 11/2017-CTR)

• For the supply of food, other articles for human consumption or beverages by Indian Railways, IRCTC or their licensees, whether in trains or at railway platforms, ITC on goods and services used for providing such supplies will not be available. However, ITC will be allowed on inputs and input services in the same line of business, namely food, other articles for human consumption or beverages procured from Indian Railways, IRCTC or their licensees for further supply in trains or at railway platforms.

Outdoor Catering Services – (Serial No. 7(iv) of Notification No 11/2017-CTR)

• For outdoor catering services covered under this entry, provided at premises other than specified premises, ITC on goods and services used for providing such services will not be available. However, ITC will be allowed on outdoor catering services procured from another outdoor catering service provider, being services in the same line of business.
• Where the other outdoor catering service provider charges CGST at a rate higher than 2.5%, ITC will be restricted to 2.5% of the value of such input service. Credit of CGST charged in excess of 2.5% will not be allowed.

Outdoor Catering Along with Renting of Premises – (Serial No. 7(v) of Notification No 11/2017-CTR)

• For a composite supply of outdoor catering services along with renting of premises at premises other than specified premises, ITC on goods and services used for providing such services will not be available. However, ITC will be allowed on outdoor catering services procured from another outdoor catering service provider, being services in the same line of business.
• Where the other outdoor catering service provider charges CGST at a rate higher than 2.5%, ITC will be restricted to 2.5% of the value of such input service. Any excess ITC will not be available.

Illustration: A engages B for outdoor catering services along with renting of premises, other than specified premises, for a wedding function for ₹1,00,000. B engages another outdoor catering service provider, C, for ₹60,000. C charges CGST at 9%, amounting to ₹5,400, while B charges A CGST at 2.5%, amounting to ₹2,500. In this case, B can claim ITC of only ₹1,500 (2.5% of ₹60,000) instead of ₹5,400.

Important Note: The amendments under Serial No. 7 continue to refer to Explanation No. (iv) of Notification No. 11/2017-Central Tax (Rate), which must be considered while applying the ITC restrictions. The revised provisions principally allow ITC on specified inward supplies in the same line of business while continuing to restrict ITC on other goods and services.

Insertion of New Entry Under Serial No. 8 in Notification No 11/2017-CTR  – Passenger Transportation Services

• The notification also provides for the insertion of a new entry after item (via) under Serial No. 8, relating to passenger transportation services. The new entry covers the transportation of passengers by electrically operated vehicles designed to carry passengers, where battery-charging costs are included in the amount charged to the passenger.
• The notification provides two CGST rate options: 2.5% with restricted ITC or 9% without the specified ITC restriction. Under the 2.5% option, ITC is allowed on eligible passenger transportation or renting services involving electrically operated vehicles procured from another service provider in the same line of business, subject to a maximum credit equivalent to 2.5% CGST on the value of such services.

Renting of Electric Vehicles for Passenger Transportation – (Serial No. 10(ib) of Notification No 11/2017-CTR)

• A new entry has been introduced for renting electrically operated vehicles designed to carry passengers, where the cost of battery charging is included in the amount charged to the service recipient. Such services will be subject to CGST at 2.5% with restricted ITC or 9% without ITC restrictions.
• Under the 2.5% CGST option, ITC on goods and services used for providing such services will not be available. However, ITC will be allowed on passenger transportation services using electrically operated vehicles or renting of electrically operated vehicles procured from another service provider, being services in the same line of business.
• Where such service provider charges CGST at a rate higher than 2.5%, ITC will be restricted to 2.5% of the value of such input services. Any excess ITC will not be available. The provisions of Explanation No. (iv) relating to ITC restrictions will also apply.

Illustration: A engages B for renting an electrically operated vehicle for passenger transportation for ₹1,000. B hires an electrically operated vehicle with an operator from C for ₹800, on which C charges CGST at 9%, amounting to ₹72. Since B charges CGST at 2.5% to A, B can claim ITC of only ₹20 (2.5% of ₹800) instead of ₹72.

Delivery Services – (Serial No. 12(iii) of Notification No 11/2017-CTR)

• The existing entry relating to delivery services has been substituted. Delivery services, other than those covered under items (i) and (ii) of Serial No. 12, will be subject to CGST at 2.5%, subject to the condition that ITC on goods and services used for providing such delivery services has not been claimed.

The amended entry covers the following delivery services:

(a) Delivery services supplied through an Electronic Commerce Operator (ECO), where the person providing such services is not liable for registration under Section 22(1) of the CGST Act, 2017.

(b) Delivery services relating to goods supplied through an Electronic Commerce Operator (ECO).

The restriction on ITC will apply in accordance with Explanation No. (iv) of the notification.

Omission of Paragraph 3 in Notification No. 11/2017-Central Tax (Rate)

• Paragraph 3 of Notification No. 11/2017-Central Tax (Rate) has been omitted.This paragraph contained provisions relating to the valuation of lottery supplies. Accordingly, the said paragraph will no longer form part of the notification with effect from 1 November 2026.

Revised Definition of Goods Transport Agency (GTA) – Explanation Clause (xxxx) of Notification No. 11/2017-Central Tax (Rate)

• The definition of Goods Transport Agency (GTA) has been substituted. Under the revised definition, a Goods Transport Agency means any person providing services relating to the transportation of goods by road who issues a consignment note, irrespective of the name by which such document is called. Accordingly, the issuance of a consignment note remains an essential requirement for classification as a Goods Transport Agency.

Introduction of Definition of Electrically Operated Vehicle – Explanation Clause (xxxxv) of Notification No. 11/2017-Central Tax (Rate)

• A new definition of Electrically Operated Vehicle has been inserted. An electrically operated vehicle means a road vehicle that operates entirely on electrical energy obtained from an external source or from one or more electrical batteries installed in the vehicle. The definition also specifically includes electric bicycles (E-bicycles).

Notification No 062026-CTR