A complete guide on Packers and Movers GST Rates in India
Moving from one place to another can be an expensive affair. There are several expenses apart from the expenses of hiring professional packers and movers. The rates of hiring moving services may depend on various factors. One of the key factors is GST charges.
What is GST?
GST stands for Goods and Services Tax. It is one indirect tax for the entire country. It has replaced many indirect taxes in the country.
GST is classified into three types: –
- CGST – Central GST
- SGST – State GST
- IGST – Integrated GST
Under the GST regime, the tax is levied on every point of the transaction on manufacturing, sale, consumption and services. GST tax rates are levied on the slabs of 5%, 12%, 18% and 28%. Basic tax rates are 18%. The subsidized goods and services come under the slabs of 5% and 12%. Luxury items attract 28% GST rate slab.
GST rates for domestic shifting
There are also different GST rate slabs for transportation services. According to many tax experts and authentic sources, the standard GST rates applicable for household goods shifting are the following.
- GST for transportation = 5%
- GST for transit insurance = 18%
- GST for Packers and Movers = 18%
Misconception about GST rates on moving industry
The contribution of the transportation industry in the development of a country is vital. The Indian transportation industry has had a large share of influence on India’s economic development. The progress of a country may slow or stop due to any problem in the transportation system. It is because disruption in transport systems can disrupt the entire business channel.
Have you ever noticed what it impacts when transportation cost is increased? People complain about inflation – rise in the cost of everything. The transportation industry is also impacted by the new GST regime.
What are the rates, levied on transport and logistics companies?
How much GST charge do Packers and Movers companies charge?
I am indirectly associated with the transportation industry. I found a number of customers’ complaints on Quora.com and other online forums on tax rates of professional packers and movers under the new GST regime. Most customers are complaining that they are being forced to pay higher GST charges. They complain that the GST rate for packers and movers come under the slab of 5% but companies often charge 18%. In fact, there is a huge misunderstanding about the new GST regime in every industry, and transportation industry is not an exception. So, what is the truth? What is the actual GST rate, professional packers and movers or logistics companies should charge? Let’s understand it.
What is the correct GST rate for the moving industry – 5% or 18%?
It is seen that logically GST tax rate of movers and packers comes under the 18% GST slab.
Let’s understand. Professional packers and movers companies are not only logistics or transport companies but they also provide full services for shifting of various types of items from one place to another.
Take the example of household goods shifting. If you hire household shifting services from one of professional movers and packers in your city, they provide you services. Major services include packing service, loading service, transportation service, unloading service, unpacking services, and rearranging services.
You see that you get total support in the whole episode of your move. You don’t need to lift even a single item with you. There are experts that will be everything for your move. Thus you get full services of professional packers and movers. And it will herby attract a GST rate of 18%.
So, why people are complaining on various online forums that the real GST rate of packers and movers is 5%.
In some ways, they are not completely wrong. There is also a provision of 5% GST rate in the transportation industry. 5% GST rate is applicable when customers solely use transport of the logistics or packers and movers company. So, you must not agree with paying 18% GST if you are using only the transport of a logistic company, it’s only 5%.
If your packers and movers show your house relocation goods as “cargo movement”, then you don’t need to pay 18% GST. Remember, cargo handling GST charges are only 5%.
In what circumstances, transportation of goods is exempt under GST?
Transportation of goods from one place can be exempted if you are transporting goods without using services of professional packers and movers or a courier agency. If you are transporting goods by inland waterways, then again is exempted under GST. Keep in mind, GST is applicable if you are using professional packers and movers or logistics companies for the transportation of goods.
The Sum and Substance
The 5% GST is applicable when you use full services of professional packers and movers. The 18% GST is applicable when using only the transport of a logic company or packers and movers.
One more important thing you should keep in mind. Don’t forget to check the GST registration of moving company, if you are paying extra GST charges. You must ensure that you only select one of GST registered packers and movers with valid GSTIN number. By hiring a registered company you can avoid possible scams. You can hire GST registered Packers and Movers through Movingsolutions.in.
For more information about GST rates applicable for logistics and transport companies, you should explore GST official website – https://www.gst.gov.in/.