For hotel accommodation, restaurant service, supply of food in trains and platforms and outdoor catering taxed at 2.5% CGST without input tax credit, input tax credit is now allowed on input services in the same line of business (for example, hotel accommodation procured from another hotel). For hotel accommodation and outdoor catering, such credit is limited to tax at 2.5% CGST where the supplier charges a higher rate.

New entries are inserted for transport of passengers by electrically operated vehicle, renting of electrically operated vehicle for passengers and renting of electrically operated vehicle for transport of goods, where the cost of battery charging is included in the consideration. The supplier may pay CGST at 2.5% without input tax credit (other than same-line input services, capped at 2.5%) or CGST at 9% with input tax credit. ‘Electrically operated vehicle’ is defined and includes e-bicycles.

Delivery services supplied through an e-commerce operator by a person not liable for registration under section 22(1), and delivery of goods supplied through an e-commerce operator, are taxed at 2.5% CGST without input tax credit. The definition of ‘goods transport agency’ is substituted and paragraph 3 of the notification is omitted. The notification comes into force on 1 November 2026.