Choline is an essential component of Acetylcholine (ACh) biosynthesis pathway which requires high-affinity Choline transporter (ChT) for its uptake into the presynaptic terminals of cholinergic neurons. Previously, we had reported a predominant expression of ChT in memory processing and storing region of the Drosophila brain called mushroom bodies (MBs). It is unknown how ChT contributes to the functional principles of MB operation. Here, we demonstrate the role of ChT in Habituation, a non-associative form of learning. Odour driven habituation traces are laid down in ChT dependent manner in antennal lobes (AL), projection neurons (PNs), and MBs. We observed that reduced habituation due to knock-down of ChT in MBs causes hypersensitivity towards odour, suggesting that ChT also regulates incoming stimulus suppression. Importantly, we show for the first time that ChT is not unique to cholinergic neurons but is also required in inhibitory GABAergic neurons to drive habituation behaviour. Our results support a model in which ChT regulates both habituation and incoming stimuli through multiple circuit loci via an interplay between excitatory and inhibitory neurons. Strikingly, the lack of ChT in MBs shows characteristics similar to the major reported features of Autism spectrum disorders (ASD), including attenuated habituation, sensory hypersensitivity as well as defective GABAergic signalling. Our data establish the role of ChT in habituation and suggest that its dysfunction may contribute to neuropsychiatric disorders like ASD.