Technically, the GST on packers and movers is 18%. However, some customers are charged for GST at the rate of 5% only. Which one is the correct GST rate for packers and movers: 5% or 18%? You need to understand several elements of GST for a clear picture of GST rates on moving services. Understanding the GST rates is crucial if you do not want to get surprises in your final relocation bill.
When moving from one place to another, either within a city or from one city to another, the first thing that often comes to mind is the cost. Apart from the basic charges for packing and moving, you need to pay several additional charges like toll tax, insurance fee, and GST.
GST (Goods and Services Tax) is one of the many cost heads included in a relocation bill. Do not expect that movers and packers will pack and transport your household goods without GST. If the company is GST-registered, it will definitely levy the GST charge as per the government norm.
If you are willing to understand the GST rates applicable to relocation services, let’s delve deeper into the matter. In this comprehensive guide on “GST rates and HSN codes for packers and movers”—we will break down everything you need to know about the GST rates applicable to packing and moving services in India.
What is GST and How Does it Apply to Packers and Movers?
Introduced in 2017 by the Government of India, GST is a simplified indirect tax as a replacement for multiple taxes like VAT, service tax, and others. This means you do not need to pay for VAT and Service Tax separately. GST applies to almost all major sectors—needless to say—transportation and relocation services.
Packers and movers or moving companies in India offer a comprehensive range of services like packing, loading, unloading, transporting, and unpacking. Here you need to understand that each of these tasks comes with different cost factors. Yet, the GST is applied to the overall costs of the service provided.
What is the GST rate on packers and movers then? The rate depends on many factors, such as the type of service (for example, full moving service or only transportation). It will be also impacted based on whether you are moving within the state or interstate.
Understanding the GST Rates for Packers and Movers
You have already learned that the GST rate for packers movers ranges between 5% to 18%. Some people say it is 18%, some say it is 12%, some say it is 9%, and some say it is 5%. A lot of confusion, indeed. What is the correct GST rate for the moving industry then? If you are curious to understand the different slabs of GST rates applicable to packers and movers services, continue reading.
The correct GST rate for the relocation industry depends on the type of service being provided by packers and movers. Let’s have a look at the detailed breakdown of GST Rates.
1. Transportation-Only Services (5%)
If you are availing of only transportation services from a packers and movers company, the applicable GST rate is 5%. This is often referred to as the GST rate for Goods Transport Agency (GTA) services, where only the goods are being transported. However, under this 5% rate, the moving company cannot claim input tax credit (ITC) on the goods and services used to provide the service.
In this option, you will get only transport service; packing, loading, unloading, and other shifting tasks are your responsibility. If a moving company tells you the GST rate for transport service is 9%, 12%, or 18%—it is not legitimate. You must not agree to that and look for another moving company to plan your move with.
2. Full-Service Packers and Movers (18%)
Usually, professional packers and movers provide a comprehensive solution to a move. The comprehensive moving solution includes a series of services like packing, loading, transportation, unloading, and unpacking. If you are availing of the complete shifting solution from a moving company, the GST rate applicable is 18%.
The GST rate for packers and movers is 18% because the company needs to go beyond transportation. They need to pack, load, unload, and unpack your belongings. In short, the 18% GST rate applies to the composite service that involves handling, packing materials, and other logistics involved in the process.
Moving companies that charge 18% GST can claim input tax credit (ITC) on the goods and services they use for providing the relocation service.
3. 12% GST – Not Applicable for Moving Industry
The 12% GST rate is not typically applicable to services in the relocation (packers and movers) industry. It is a rate generally seen in other goods and service categories but does not apply to packers and movers or goods transportation services.
4. GST on Insurance Provided by Packers and Movers (18%)
Many packers and movers offer insurance coverage for goods during transit. The insurance ensures that your goods are protected against damages. If, unfortunately, your belongings get damaged in transit, the movers will cover the loss and compensate you as per the insurance coverage policy. However, the insurance coverage is complimentary. If you opt for insurance coverage, it is subject to an 18% GST. This means you need to account for this additional charge when calculating the overall moving cost.
Intra-State vs. Inter-State Moving: GST Differences
Relocation can be either intra-state (within the same state) or inter-state (across state borders). The GST implications vary for both:
- Intra-State Moving: For relocations within the same state, the service is considered an intra-state transaction. In such cases, two types of GST are levied – CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax). Each is charged at 9%, making the total GST 18%.
- Inter-State Moving: When moving across state borders, Integrated Goods and Services Tax (IGST) is applied. The IGST rate for packers and movers stands at 18%, applicable to the total packers and movers bill amount.
Packers and Movers HSN Code and Break-Up of GST for Different Services
Packers and Movers HSN code is 8431. Their GST classification comes under Goods Transport Agencies (GTA). To help you understand better, here is a breakdown of the GST rate applied to various services provided by packers and movers in India.
| Packers and Movers Services Type | CGST (Central GST) | SGST (State GST) | IGST (Integrated GST) |
| Packing materials | 9% | 9% | 18% GST |
| Labor (handling) charges | 9% | 9% | 18% GST |
| Composite service (packing, assembly, disassembly, loading, transport, unloading, and unpacking) | 9% | 9% | 18% GST |
| Transportation of goods (wherein only transport service is availed) | 2.5% | 2.5% | 5% GST |
| Transport service with insurance | 9% | 9% | 18% GST |
| Insurance coverage (standalone) | 9% | 9% | 18% GST |
Please note: When all these services are combined, the overall GST on Packers and Movers comes to 18% for full-service packers and movers.
How to Calculate GST on Packers and Movers Services
Let’s say you hire a packers and movers service and the total bill for packing, moving, and unpacking comes to ₹50,000. Here’s how GST will be calculated:
- Basic cost: ₹50,000
- GST (18%): ₹9,000
- Total cost after GST: ₹59,000
If you’re availing transportation services only and the total cost is ₹30,000, then the calculation would be:
- Basic cost: ₹30,000
- GST (5%): ₹1,500
- Total cost after GST: ₹31,500
Transportation of Goods Exempt Under GST
The transportation of goods by road under the GST law in India is exempted from GST, if the gross amount charged for transport is less than ₹ 1500 per consignment. This exemption will specifically apply to transportation involving goods transport agencies (GTAs) to moving companies that transport goods.
Here is how it works:
- Consignment-based exemption: No GST is levied if the total cost of transporting a single consignment is less than ₹1500. This applies to situations in which the service is rendered by a goods transport agency.
- Per consignee basis: The transportation service is also exempt from GST if the gross sum charged for each consignee (receiver of goods) is less than ₹750.
Misconceptions About GST Rates in the Moving Industry
The introduction of GST (Goods and Services Tax) in India in 2017 has simplified the country’s tax system, but it has also led to some confusion, particularly in the moving and relocation industry. Many customers and even some service providers often have misconceptions about how GST applies to packers and movers services. Let’s explore some of the common misconceptions surrounding GST rates in the moving industry and clarify the facts.
1. Misconception: GST is Charged Only for Interstate Moves
Reality: This is not true. GST is applicable to both intra-state (within the same state) and interstate (from one state to another) moves. For an intra-state move, you need to pay SGST (State GST) + CGST (Central GST). When it comes to an interstate move, you need to pay IGST (Integrated GST) which is also a combination of CGST and SGST. Thus, you see that only the tax structure differs; you still need to pay GST in both scenarios.
2. Misconception: GST on Packers and Movers is Always 5%
Reality: This is not the complete truth. Yes, packers and movers levy 5% GST but only in the case wherein you only use transport service. In the case of a comprehensive service of a mover, you need to pay 18% GST.
3. Misconception: Full-Service Moves Have No GST Breakdown
Reality: This is only a myth. Although the total GST is 18% GST on full-service moving; it covers packing, labor, and transportation. Companies should itemize these charges separately on their invoice.
4. Misconception: GST Doesn’t Apply if the Company is Small
Reality: This is not the complete truth. Some small moving companies might not charge GST; legitimate companies (offering intercity or interstate moving services) will charge GST. If a moving company is charging GST, make sure that they provide a GST registration number, regardless of their size.
5. Misconception: GST Rates Can Be Avoided Through Negotiation
Reality: Negotiating with packers and movers will not avoid GST. It is a mandatory tax. If a moving company claims to waive the GST, you must be cautious. Such companies could be unregistered or fraudulent movers.
6. Misconception: GST is Included in Every Quote
Reality: This is not true. Some moving companies may provide you quotes exclusive of GST and will add GST later to the final bill. So, clarify this beforehand to avoid further misunderstanding or dispute with your packers and movers.
7. Misconception: GST is the Only Charge on Moving Services
Reality: This is only a misconception. There are other charges on moving services such as insurance fees, toll taxes, parking charges, and octroi. Remember that movers also levy 18% GST on insurance fees.
8. Misconception: Individuals Can Claim GST as a Refund
Reality: No. Individuals or families cannot claim GST as a refund. There is a rule that GST paid to packers and movers is not eligible for personal moves. However, businesses relocating their offices or commercial goods can claim the GST as ITC (input tax credit), which reduces their overall tax liability.
9. Misconception: GST is Always Applied Correctly by Movers
Reality: This is also a misconception. Some dishonest moving companies may charge 18% GST even for transport-only services. Some companies also do not charge even a single rupee as the GST charge, which is illegal, if they are a GST-registered packers and movers company. In short, moving companies can overcharge or undercharge GST.
11. Misconception: Moving Locally Doesn’t Incur GST
Reality: Don’t think so; this is not true. Moving from one place to another even within the same city is subject to 18% GST (9% as CGST and 9% as SGST).
Being aware of these misconceptions will help you make informed decisions and avoid any surprises when the final relocation bill arrives. Always verify the GST details with your packers and movers and insist on a proper breakdown of charges to ensure transparency in your moving process.
Important Tips for Customers
- Compare Quotes: Before selecting a packers and movers service, get quotes from multiple companies. Make sure that the quotes are inclusive of GST to avoid surprises later.
- Check GST Number: Only moving companies registered under GST can legally charge GST. So, always check the company’s GST registration number to ensure you hire a legitimate service provider.
- Break-up of Charges: Ask for a clear break-up of relocation charges. This will help you understand how much you are paying for different services like packing, transportation, and insurance.
- Negotiate: Sometimes moving companies offer discounts or reduce the service charge. Thus, you can get relocation services at cheaper rates if you negotiate with your packers and movers.
How to Avoid Fraudulent Packers and Movers
The relocation industry in India has its fair share of fraudulent operators. Here are some tips to ensure you are dealing with a reliable moving company:
- Verify GST Registration: Genuine packers and movers will have a GST registration number. Ask for it and verify it online through the GST portal.
- Check Reviews and Ratings: Before selecting a mover, go through customer reviews and ratings on platforms like Google, Justdial, or Facebook.
- Physical Office Visit: Visit the movers’ office to get a feel of their operation. This will give you an idea of their professionalism and whether they are equipped to handle your move.
- Avoid Extremely Low Quotes: If a mover offers a quote that is significantly lower than others, it could be a red flag. Often, fraudulent companies lure customers with low rates and later demand more money.
- Get Everything in Writing: Ensure that the moving company provides a written contract detailing all services and costs. Make sure that the contract clearly mentions the GST component and any additional charges.
Conclusion
Understanding the GST rates on packers and movers services is crucial for anyone planning to relocate. With the rates ranging from 5% to 18%, knowing how GST affects your final bill will help you budget accordingly.
Whether you’re moving within the state or across states, ensuring you work with a legitimate, GST-compliant packers and movers company will not only give you peace of mind but also ensure transparency in costs.
Always compare quotes, verify the GST registration, and get a clear break-up of charges before making a decision. Happy moving!
FAQs on Packers and Movers GST Rates
Q: Why is GST on packers and movers higher?
You may wonder why GST for packers and movers is as high as 18% for full services. This is because moving companies offer a range of services in one package. The high GST rate covers not only the transportation but also the cost of packing materials, insurance coverage, and other related services like packing, loading, unloading, and unpacking.
Q: Can I claim GST for packers and movers?
You cannot claim GST for packers and movers if you are relocating your home. This is because moving personal belongings comes under a personal expense which cannot be claimed as an input tax credit. However, you claim the GST paid as input tax credit if you are shifting office or commercial belongings from one place to another.
Q: How does GST affect packers and movers pricing?
GST has impacted the overall price of packers and movers services in a very significant manner. Before the advent of GST, it was all so confusing for customers as various companies used to charge various forms of taxes—be it VAT, service tax, etc. However, post-GST, the pricing is much more streamlined but has increased the overall cost of services. For example, previously, packers and moving people would have charged a service tax of approximately 15%. That is, with GST, the rate is 18%, and hence the cost for the customer is high.
Q: What is the GST rate for packers and movers in India?
The GST rate for packers and movers in India is 5% for transport-only services and 18% for complete shifting services.
Q: Is GST mandatory on packers and movers services?
Yes, GST is mandatory on all packers and movers services in India. It applies to both intra-state and inter-state moves.
Q: How much GST is charged for transportation-only services?
In this scenario, the GST on packers and movers is only 5%. Bear in mind that the movers will not do other shifting tasks with this option of a 5% GST rate.
Q: Is GST applicable on packing materials used by packers and movers?
Yes, GST at 18% is applicable on packing materials used by packers and movers as part of the relocation service.
Q: Do I have to pay GST on the insurance provided by packers and movers?
Yes, if packers and movers provide insurance for your goods during transit. The GST on insurance is 18%.
Q: What is the difference between CGST, SGST, and IGST on packers and movers services?
For intra-state moves, CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) are each charged at 9%. For inter-state moves, IGST (Integrated Goods and Services Tax) is charged at 18%.
Q: How is GST calculated on full-service packers and movers?
GST is calculated at 18% of the total cost of services. For example, if your total bill is ₹50,000, the GST amount will be ₹9,000, making the total relocation bill ₹59,000.
Q: Is GST charged separately for packing, loading, and transportation services?
Yes, GST is applied separately on packing materials (18%), labor (18%), and transportation (5%). However, for full-service moves, an 18% GST is applied to the overall cost.
Q: Is GST the same for residential and commercial relocation?
Yes, the GST rate remains the same (5% for transportation and 18% for full services) whether the relocation is residential or commercial.
Q: Does GST apply to local or intra-state moving?
Yes, GST applies to intra-state moving. In such cases, CGST and SGST are charged, each at 9%, making a total of 18%.
Q: Does GST apply to inter-state moving?
Yes, GST applies to inter-state moves as well. In this case, IGST is charged at 18%.
Q: Why are some packers and movers charging only 5% GST?
Some packers and movers may charge only 5% GST if they are providing transportation-only services. For full-service moves (including packing, loading, and unpacking), the GST rate should be 18%.
Q: Can packers and movers charge GST without a GST registration?
No, only moving companies registered under GST are legally allowed to charge GST. So, always ask for the GST registration number and verify it online.
Q: How can I verify if a packers and movers company is registered under GST?
You can verify the GST registration of a packers and movers company by checking their GST number on the official GST portal.
Q: Are there any additional charges apart from GST when hiring packers and movers?
Yes, apart from GST, additional charges may include insurance fees, toll charges, parking charges, and handling fees.
Q: How can I reduce the GST costs when moving?
To reduce GST costs when moving, consider hiring only transportation services, as the GST for transportation is 5%. However, this means you will need to handle the packing and unpacking yourself.
Q: Is GST on packers and movers refundable?
No, GST paid for household relocations is non-refundable for individuals. However, businesses can claim a refund as part of the input tax credit.
A copywriter, blogger, content strategist by profession, and an information junkie by heart. I have a penchant for reading, researching, writing, and anything related to creating persuasive content. For me, writing is something that ignites my creativity and helps in keeping me on cloud nine. I have been working in the content writing domain since 2006. Be it blogging or copywriting, I create better content that fuels conversations and skyrockets search traffic.
