Moving from one place to another is a hectic process. Many people relocate to a new city for many reasons, such as jobs, studies, family perks, better opportunities, etc. The packers and movers simplify the process and carry out the entire relocation from beginning to end. At the time of shifting your household items, you should have basic knowledge of Goods and Services Tax to make a budget for your move. The GST on the household items is 5% of the total service charge. On this page, we will discuss the GST rates for packers and movers in India.

What is GST?

The expanded form of GST is Goods and Services 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. This is applied to certain goods and services that are applicable across India.

GST CHARGES ON RESIDENTIAL RELOCATION

The GST charges on residential relocation will depend on the values of the goods which are being moved.

  1. Less than 5lakhs goods, the GST rate is 5%
  2. More than 5lakhs goods, the GST rate is 18%

GST CHARGES ON COMMERCIAL RELOCATION

The GST charges of commercial relocation depend on the nature of the business. For example, the relocation rate of packers and movers for a manufacturing unit is 18%, and the GST rate of a retail store is 5%. It is necessary to understand these rates so that you can plan accordingly.

PACKERS AND MOVERS SERVICES

It depends on the nature of the services:

  1. The GST rate will be 5% for only transportation services.
  2. The GST rate will be 18% for complete relocation service, including packing, unpacking, loading, unloading and insurance.
  3. If the packers and movers provide the transit insurance for transported goods, then it will also be 18%.

Note: the GST rates change from time to time, so it is always best to check with the latest regulations before making a decision.

GST RATE FOR PACKERS AND MOVERS

How do you optimize GST expenses during a move?

Tips for GST optimization:

  1. Plan your move for stress-free transition and get different quotes from different packers and movers.
  2. Choose packers and movers who are registered with GST for transparency and safety purposes.
  3. The invoices should be appropriately documented with the details of the services provided and applicable GST rates.

Misconception regarding the packers and movers GST rates

The transport industry of India has had a significant 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. The reason is that 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 platforms where people or customers 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 massive misunderstanding regarding the GST rates in the transport industry.

FACTORS AFFECTING GST RATES

  1. TRANSPORT DISTANCE: The distance also plays a crucial part in determining the GST rates. The longer distance makes the GST rate higher due to fuel expenses and logistics rates.
  2. PACKAGING MATERIALS: The type and quantity of packaging material can also affect GST rates.
  3. ADDITIONAL SERVICES: If you opt for any additional services, such as rearranging the furniture, assembling and disassembling items or storage facilities. Each service comes with its own GST implications.

What is the 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 significant services: packing, loading, transporting, 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 entirely 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 couriers 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 professional packers and movers or any logistics company to transport your goods.

On this page, we discussed how much GST is imposed on packers and movers. We also cleared the misconception between the 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.

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