Moving from one place to another is a hectic process. Many people relocate to a new city for many reasons, such as jobs, studies, etc. Everything needs to be properly packed and loaded in a truck for relocation. That’s why the packers and movers exist, who carry out the entire relocation process from start to end. One major factor affecting the packers and movers charges is taxes. But, with the introduction of the GST in 2017, the tax applicability on the packing and moving services has changed. On this page, we will discuss the GST rates for packers and movers in India.
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What is GST?
GST, which stands for Goods and Services Tax, is an indirect tax. It was implemented in India on 1st July 2017 and has replaced all the other indirect taxes, such as value-added tax, service tax, purchase tax, etc. It’s applied to certain goods and services and is applicable across India.
There are four types of GST in India:
|GST Type||Full form|
|CGST||Central Goods and Services Tax|
|SGST||State Goods and Services Tax|
|IGST||Integrated Goods and Services Tax|
|UGST||Union Territory Goods and Services Tax|
Under the GST system, this tax is imposed on all aspects of transactions, like manufacturing, consumption, sales, and services. The GST tax rates are imposed on the slabs of 5%, 12%, 18%, and 28%, and the basic taxes are 18%. The luxury items fall under the 28% slab. Subsidized goods and services come under 5% and 12%.
What are the GST rates for domestic relocation?
Also, there are different tax rate slabs for transportation services. Following are the rates of GST on household goods shifting, according to genuine sources:
- GST rate for transport – 5%
- GST rate for transit insurance – 18%
- GST rate for packers and movers (complete packing and moving service) – 18%
Misconception regarding the packers and movers GST rates
The transport industry of India has had a huge impact on the country’s economic development. Any problem in the transport industry can either slow down or put a halt to the growth in the economic development of the country. This is because stopping transportation for even one day can disturb the entire business channel.
There has been inflation in every industry, which people are complaining about, including the packers and movers industry. There are many online forums where people complain about being charged higher GST rates for packers and movers on their total moving costs. They are complaining that the GST rates of movers and packers come under the 5% slab, but they are being charged 18%. There is a huge misunderstanding regarding the GST rates in the transport industry.
What are the correct packers and movers GST rates? We have answered below.
Correct GST rate on packers and movers – 5% or 18%?
The GST rate of packers and movers logically is 18%. The packers and movers are not only logistics or transport companies. They offer complete service of relocating different kinds of items from one place to another. For example, if you have to move from Pune to Delhi and you hire packers and movers. They will offer different services to ensure a safe and smooth relocation to the new city. They will take care of major services: packing, loading, transport, unloading, unpacking, and rearranging.
By choosing the complete relocation service of the packers and movers, you get start-to-end, smooth, and hassle-free relocation without you having to do any work. As you get full packing and moving service, you are charged 18% GST.
So, what about the people claiming that the GST tax rate of movers and packers is 5%? Well, they are not completely wrong. The GST rate for transport is 5% which applies to those who opt for only the transport service offered by logistics or the packers and movers. So, if you only relocate your goods and have not opted for any other services such as packing, loading, unpacking, unloading, etc., you only have to pay 5% GST instead of 18%.
Under what circumstances goods transportation is exempt from GST?
GST is exempted on the transportation of goods, if you are moving your goods without the services of courier or packers and movers. GST is also not applicable if you are transporting your goods through inland waterways. GST is imposed only when you book the services of professional packers and movers or a logistics company for transporting your goods.
On this page we discussed how much GST on packers and movers is imposed. We also cleared the misconception between 5% and 18% GST rate on packers and movers in India. Remember to check the GST registration number of the moving company if you are asked to pay GST taxes. For more information regarding the GST rates in India, visit www.gst.gov.in.
And, if you are searching for reliable packers and movers anywhere in India, you can rely on Thepackersmovers.com. It is one of the top online moving company directories where you can find proficient, authentic, skilled packers and movers in Delhi, Kolkata, Noida, etc.