GST on packers and movers has been a topic of interest for many individuals and businesses since introducing the Goods and Services Tax (GST) in India. GST on packers and movers varies based on the type of service provided and can range from 5% to 18%. Let’s delve deeper into the rates, HSN code, and applicability of GST for packers and movers.
Table of Contents
What is GST on Packers and Movers?
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Packers and movers GST rate falls under the purview of GST, as the services they provide are considered taxable supplies. According to the GST laws, packers and movers are classified as Goods Transport Agencies (GTAs) and are subject to specific regulations.
GST Rates for Packers and Movers Services
The GST rate on packers and movers depends on the specific services they offer.
Here’s a breakdown:
1. GST on Transportation Services
If the packers and movers only provide transportation services without ancillary services like packing or loading, the applicable GST rate is 5% without Input Tax Credit (ITC). This falls under the category of GST on Transport Services.
2. GST on Transit Insurance
Transit insurance, which covers goods during transportation, attracts a GST rate of 18%. This is separate from the GST on Freight Charges applicable to the transportation service.
3. GST on Full Packers and Movers Services
When packers and movers provide a composite supply of services, including packing, loading, transportation, unloading, and unpacking, the applicable GST rate is 18%. The bundle of services is treated as a single composite supply, with transportation being the principal supply.
4. GST on Cargo Movement
For cargo movement services provided by packers and movers, the GST rate is 18%. This includes both domestic and international cargo transportation.
5. GST Rates for Domestic Relocation
For domestic household shifting services, the movers and packers GST rate is as follows:
|
Service Type |
GST Rate |
|---|---|
|
Transportation only |
5% |
|
Full services (packing, moving, etc.) |
18% |
When Can GST on Goods Transportation Be Exempted?
In certain situations, GST on Services related to goods transportation can be exempted:
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If you move your household goods yourself without hiring professional packers and movers, no GST is applicable.
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Goods transported via inland waterways are exempt from GST.
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If the value of goods transported in a single carriage is less than ₹1,500, no GST is charged.
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If the value of all goods transported for a single consignee is less than ₹750, GST is not applicable.
How Much GST Do Packers and Movers Charge?
The amount of GST charged by packers and movers depends on the services you opt for:
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If you only require transportation services, the GST rate is 5%.
-
For a comprehensive package including packing, loading, unloading, and unpacking, the GST rate is 18%.
Many customers get confused about why they are charged 18% GST when they believe the rate should be 5%. It’s important to clarify with the packers and movers about the specific services included in your package to avoid any misunderstanding.
Why Do People Have Issues with the 5% GST Rate?
Some customers feel misled when charged 18% GST by packers and movers, even though they believe the rate should be 5%. This confusion arises because the 5% rate is applicable only for transportation services, while the 18% rate applies to a composite supply of services, including packing and moving.
Applicability of GST on Packers and Movers
Under GST, packers and movers are classified as Goods Transport Agencies (GTAs). GTAs are responsible for paying GST on the services they provide. However, there are certain exemptions:
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If the GTA transports agricultural produce, milk, salt, food grains, organic manure, or other exempt goods, no GST is applicable.
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If the GTA is transporting personal household effects, the service is exempt from GST.
Packers and Movers HSN Code and GST Rate
The HSN (Harmonized System of Nomenclature) code for packers and movers GST is 9965 or 9966. HSN 9965 covers “Goods transport services,” while HSN 9966 covers “Other support services for transportation.”
The applicable GST rates under these HSN codes are:
|
HSN Code |
Service Type |
GST Rate |
|---|---|---|
| 9965 |
Goods transport services |
5% without ITC |
| 9966 |
Other support services for transportation |
18% with ITC |
Is ITC Available for GST on Packers and Movers Services?
Input Tax Credit (ITC) allows businesses to claim credit for the GST paid on inputs used in providing their services. However, the availability of ITC depends on the type of service availed:
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Individuals who hire packers and movers for personal household shifting cannot claim ITC, as the service is for personal use.
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Businesses that hire packers and movers for office relocation or transportation of business assets can claim ITC, subject to certain conditions.
How to Ensure You’re Paying the Correct GST for Moving Services?
To ensure you’re paying the correct GST for packers and movers, follow these steps:
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Clarify with the packers and movers about the specific services included in your package and the applicable GST rates.
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Request a detailed tax invoice that mentions the SAC code, taxable value, GST rate, and GST amount for each service.
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Verify the GST registration number of the packers and movers on the GST portal to ensure they are genuine.
Conclusion
Understanding GST on packers and movers is essential for anyone planning a relocation. The applicable GST rates vary based on the nature of the services availed, with transportation-only services attracting 5% GST and full-service packages being taxed at 18%. By familiarising yourself with the HSN code, GST rates, and ITC provisions, you can ensure a smooth and compliant relocation experience.
Frequently Asked Questions (FAQs)
1. Is GST applicable to both local and interstate household moves?
Yes, GST applies to local and interstate household moves as long as a registered GTA provides the services.
2. Can I avoid paying GST to reduce moving costs?
No, you cannot avoid paying GST to reduce moving costs. Packers and movers are required to charge GST as per the applicable rates. Attempting to evade GST is illegal and can result in penalties.
3. Is Input Tax Credit (ITC) available on GST paid for packers and movers services?
ITC is generally not available for individuals relocating for personal reasons. However, businesses moving office assets may be eligible to claim ITC, subject to specific conditions.
4. What should I look for in a GST invoice from the moving company?
Look for the GST number, itemised services, and correct GST rates (5% for transport and 18% for packing/labour) on the invoice.
5. Can I get a refund if I was charged GST incorrectly?
If you believe you were charged GST incorrectly, you can request a refund from the packers and movers. If they don’t resolve the issue, you can file a complaint with the GST authorities.
6. What happens if my movers don’t provide a GST invoice?
If your packers and movers fail to provide a GST invoice, it could be a red flag. Insist on receiving a proper invoice, and if they refuse, consider filing a complaint with the GST authorities.
