Goods and Services Tax (GST) was introduced in India on 1st July 2017 as a comprehensive means to collect indirect taxes while replacing multiple taxes like excise duty, service tax, and VAT. Naturally, the GST rate for each industry varies. For instance, for a goods and transport agency (GTA), the tax varies from 5% to 18%, depending on the type of service you hire.
In fact, there have been several misunderstandings related to the applicability of the right GST rate. This article aims to provide a comprehensive guide on GST and packers and movers charges in India. Keep reading to learn more.
GST Rates for Packers and Movers Services in India
The standard packers and movers charges based on GST slabs are as follows:
- The rate of GST, if the customer only hires transportation services from packers and movers agencies (GTA), is 5 or 12%.
- The rate of GST, if the customer chooses a complete relocation service, which includes packing, dissembling appliances, loading and unloading goods, unpacking boxes, transportation, as well as getting insurance, is 18%.
- The rate of GST, if the customer gets transportation services with transit insurance, is 18%.
Common Misunderstandings Related to GST Rates on Good Transportation Agency (GTA)
It is a common misconception that the Goods Transport Agency industry contributes little to a country’s economic progress. However, this couldn’t be further from the truth. A disruption in the transportation sector can cause a ripple effect on other commercial channels, eventually slowing down India’s economic growth. In fact, logistics is the lifeline for the country’s economy.
The recent implementation of GST laws significantly impacts the packers and movers industry, which is an essential part of the transportation sector. But some people seem to complain that they have been wrongly charged 18% on transportation services instead of 5%. Many clients have also raised concerns regarding the increased GST fees they are being forced to pay. Well, although they are right in certain aspects, there are a few basic areas that need to be clarified.
What are the Right Packers and Movers Charges Under GST?
While the GST rates for transportation services are classified under the 5% slab, some corporations have charged their customers a higher rate of 18%. This has led to dissatisfaction among people who feel that they are being overcharged for the services rendered.
It is crucial to note that the GST rates for packers and movers services in India are subject to various factors, including the nature and extent of the services provided. As mentioned above, the GST slab for transportation services is 5% which entails cargo shifting only. However, if you choose a company that also provides packaging, loading, unloading, and unpacking services, it will come under the 18% slab.
For instance, if you need assistance with packing and dissembling your luggage and require only transportation within a city, then you can hire reliable packers and movers like Porter, who will not only transport your goods but also help in packing and unpacking them.
Moreover, if you get transportation service with moving insurance, it will also land on the 18% slab.
Naturally, if your service provider is only offering cargo shifting from one place to another, then they should be billing 5% and not 18%.
GST Exempt Goods Transportation Services
When it comes to the transportation of goods, GST exemption is available if you transport the goods yourself without the help of professional packers and movers or a courier agency. Additionally, if you choose to transport goods via inland waterways, GST exemption is also applicable. In case you use professional packers and movers or logistics companies for the transportation of goods, GST will be applicable. However, transportation of goods where the packers and movers charge less than Rs. 1500 is also exempted under GST.
You must have a clear idea about the GST slabs and packers and movers’ charges associated with their services. For instance, if you use the complete services of professional packers and movers, you will be charged an 18% GST rate.
However, if you only need transportation services from a logistics company, the GST rate applicable is 5%. Furthermore, you should check the GST registration of the moving company before paying extra GST charges. Always choose a GST-registered packers and movers service provider with a valid GSTIN number to avoid any possible fraudulent activities. For an efficient packers and movers service, choose Porter Packers and Movers for packing support at affordable prices.
