GST Rates on Packers and Movers in India

You are going to be shifting out from your house and the estimation of GST on packers and movers bill says it is 18%, why? Are you also confused why they are not charging at the rate of 5%?

One of the tedious and expensive affairs, Relocation. Sometimes it takes all of you out to just get a house shifted to another place. Further, there are many other expenses apart from hiring packers and movers. There are different factors through which professional movers charges may be depending. One important factor is GST. As you may know that packers and movers is a business which helps people to transport their belongings from one place to another.

There can be different reasons to move from one place to another. In any way it is really hectic. Apart from that, it involves transportation expenses, pack everything and loading everything then loading it on vehicles is a tough job. After the government enforced GST system in India by July 1, 2017, there are some changes that has been made on tax applicability in this service. Through this post we are going to discuss about the GST on packers and movers and related things as well.

GST which is short for Goods and Services Tax is known to be an indirect tax system in India and there are five tax slabs for this which are- 0%, 5%, 12%, 18%, and 28%.

What is GST?

GST stands for Goods and Services Tax. It is simply an indirect tax system throughout the country. It has replaced many of the indirect taxes in the country.

GST is of three types-

• CGST – Central GST
• SGST – State GST
• IGST – Integrated GST

So, what GST do is to levied tax on every point of the transaction on manufacturing, sale, consumption and services. However, basic rates are 18%. Whereas, the subsidized goods and services is governed by the slab of 5% and 12%.Luxury items comes under 28% slab.

Rates of GST on movers and packers services

As every service has some amount of tax to pay, shifting services also have some tax. As shifting services builds with mixed type of services as movers comes under transportation services and packers are labour services. So, if we calculate the GST with shifting services we can roughly get some ideas as:

GST on transportation services

If we generally transportation services have 5%. So, if any clients choose to opt for only transportation which is only moving service from professional packers and movers, then GST rate on packers and movers for the transportation would be levied of 5%.

GST on transit insurance

To sign up an insurance contract for transportation, then the GST rates would be charged at 18%.

GST on Packers and Movers services

If you are interested to get the complete services from professional packers and movers then the tax would be of 18% as it would include packing, loading & unloading and transportation as well.

GST on cargo movement

There are some of the packers and movers who offer relocation services in the form of “Cargo movement”. So, for this, transport GST rate on Cargo movement will be levied at 5%.

So you have to note that the normal GST charges for the relocation services is 18% whereas if you choose to opt only for transport services then the tax levied is 5%.

This sometimes even creates confusion as clients start to think that the tax levied only will be 5%. So it's not true. The 5% tax is levied only for transportation which just to move your belongings to one point to another. In this case, you will be doing packing and loading on your own.

GST rates on Domestic Relocation services

As mentioned earlier, there are different GST slabs on transportation services. According to different tax officials, the standard GST rates applicable for household goods moving are:

GST rates for transportation = 5%

GST rates for transit insurance = 18%

GST rates for Packers and Movers (including complete Packing and Moving Services)= 18%

So, this is a general estimate on GST on packers and movers in India, for the customized services and facilities you can connect with professional moving services providers.

In what situation GST on transportation of goods can be exempted?

There's a condition where the GST on transportation of goods can be exempted. How? Let's get to know more about it.

When you choose to transport the goods without using the professional packers and movers services or through a courier agency. However, if you choose to transport your goods through inland waterways then also the GST can be exempted. But make sure to keep in mind that, GST is applied when you opt to use complete services from packers and movers or from logistics companies to transport your belongings.

How Much GST Charges do Packers and Movers Charge?

There are a lot of people who are confused for the matter of GST for packers & movers they even asks questions through different forum. So we are going to get an answer for that. Most of the time client complaints that their professional moving company is charging them with higher GST rates. While they say that the GST rates for packers and movers is 5%, but the company is charging 18%. This is the point of issue as this matter is creating a lot of misunderstanding here. So let's just clear it out.

Professional packers and movers companies are there to provide not just only logistics services but they also help you to pack, load and unload the belonging as well.

So, if you are opting to get packers and movers services, then they will help you with packing up the moveable items, loading them into truck, then transportation and then unloading as well. Hence, you get the total shifting services from the professional side. Which doesn't even require to lift any single item for the relocation. This is why it comes under the slab of GST on movers and packers 18%.

Then why people have problem that the GST is 5%.

However, the complainant is not completely wrong. 5% of GST rate is applicable when the customers opt for only transportation of goods. So if you decide to pack, load and unload your moveable items on your own then the GST rate on transport of goods by road is 5%. In this case, you won't be charges at the rate of 18%.

Conclusion

The other important thing that you should keep in mind is that don't forget to check the GST registration number of the professional packers and movers company. Always ask about the GST registration number in GSTIN format and only hire professionals with registration. When you hire registered moving company services there will be less to no chance of scams.