Relocate to one place to another can be a difficult task. There are several expenses interlink of hiring professional packers and movers. One of the expense is GST charges.
Important Note: - (GST Rates For Domestic Shifting)
- Key Points: GST on Packers and Movers is 5% – if you use only transport (logistics) service.
- GST rates on Packers and Movers is 18% for complete packing and moving services.
- GST on transit insurance is also 18%
What is GST in India?
GST is known as the Goods and Services Tax, and it is an indirect tax that has replaced many indirect taxes in India, such as excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in Parliament on 29th March 2017 and came into effect on 1st July 2017. In other words, Goods and Service Tax (GST) is levied on the supply of goods and services. India's goods and Services Tax Law is a comprehensive, multi-stage, destination-based tax charged on every value addition. GST is a single domestic indirect tax law for the entire country.
GST is classified into three types: –
- CGST – Central GST
- SGST – State GST
- IGST – Integrated GST
What is GTA?
GST laws define GTA in notification no. 12/2017-Central Tax (Rate) dated 28.06.2017), which states that ‘goods transport agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. GTA service providers can register in the state under GST if aggregate turnover in a financial year exceeds Rs. 20 lakhs.
Applicability of GST rates on GTA
- The services of GTA (packers and movers) attract two kinds of GST rates.
- 5% (2.5% CGST & 2.5% SGST) – If the GTA supplier do not avail Input Tax Credit (ITC)
- 12% (6% CGST & 6% SGST) – If the GTA supplier takes Input Tax Credit (ITC)
From 1st of July 2017, the new GST regime had started. According to the GST regime, the GST rate of 5 % will be paid by the recipient of the services of GTA. But, if the GTA service provider levies 12% GST on the invoice, then he becomes liable to pay this tax to the government.
What Is The GST Rate For Packers And Movers?
The packers and movers in India come under the category of Goods Transport Agencies (GTA). The applicability of Goods & Services Tax (GST) on the moving companies in India will be similar to the one charged on GTA.
What is the right GST rate/charges for the moving industry – 5% or 18%?
The GST rate of movers and packers comes under the 18% GST slab.
Let's understand. Professional packers and movers companies are logistics or transport companies, but they also provide complete services for shifting various items from one place to another.
Let's understand this as an example...
If you hire professional packers and movers for home shifting from one of your city's, they provide you with services that includes 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. Some experts will be everything for your move. Thus you get full services of professional packers and movers in Jaipur. And it will herby attract a GST rate of 18%.
So, people always complain about various online platforms that the accurate GST charges of packers and movers are 5%.
Must Read: - Tips to Find Reliable Shifting Service Provider
In some ways, they are not completely wrong. There is also a 5% GST rate in the transportation industry, and a 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%.
How To Check Packers & Movers Valid GST Number?
To ensure that you choose a GST registered transporter, cross-check his GST number. Like VAT used previously, the company you choose should have a valid GST number and provide you original packers and movers GST bill. Any movers and packers company having a valid GST number will confidently give you affordable shifting quote on their services.
Frequently Asked Questions - About Packers And Movers GST Charges
Yes: GST on Packers and Movers is 5% – if you use only transport (logistics) service. GST rates on Packers and Movers is 18% for complete packing and moving services.
No. 11, (i) Services of goods transport agency (GTA) about transportation of goods (including used household goods for personal use) (Heading 9965 &9967 respectively) attracts GST @2.5% or 6% CGST. An identical rate would be applicable for SGST also, taking the effective rate to 5% or 12%.
Yes, all expenses like freight/ transport/ packing charged in the Sale Invoice are taxable in GST. GST shall be charged at the rate of these services applicable to goods.
Essential household items like toothpaste and hair oil, which currently attract 28% tax, will only be 18%. Sweets will also be taxable at 5%.
It is well known that toll services for access to roads or bridges are exempt from GST. Riders and drivers need not pay GST while paying toll charges.
What is GST on commercial vehicles? Commercial vehicles that carry passengers or goods draw a GST rate ranging from 12% percent to 28% percent. The tractors with engine capacity exceeding 1,800cc attract a GST of 12% percent.