GST on Packers and Movers: Why the Confusion?
When booking packers and movers in India, one of the most common questions customers ask is: "What is the exact GST rate on packers and movers?" You may find one moving company quoting 5% GST while another quotes 18% GST. This often leads to suspicion that movers are overcharging or manipulating tax invoices.
However, under Indian Goods and Services Tax (GST) regulations, both 5% and 18% GST rates are legally valid, depending strictly on the nature of services rendered and whether Input Tax Credit (ITC) is claimed by the logistics company.
The Two GST Rates on Shifting Services: 5% vs 18% Explained
Under GST law, relocation companies operate under two distinct tax structures:
1. 5% GST Rate (Without ITC)
Applicable to: Pure transportation / Goods Transport Agency (GTA) services.
- Covers only truck freight, fuel, and road transit.
- Does NOT include professional packing, loading labor, or unpacking.
- The mover cannot claim Input Tax Credit on vehicle purchases, fuel, or packaging supplies.
- Best suited when you pack your own boxes and hire only the transport vehicle.
2. 18% GST Rate (With ITC)
Applicable to: Composite Relocation & Cargo Handling Services.
- Covers full end-to-end relocation: multi-layer packing, loading, road transport, transit insurance, unloading, and unpacking.
- Classified as a "Composite Supply" under SAC Code 9967.
- The mover can claim ITC, allowing corporate B2B clients to claim input credit against their own GST liabilities.
- Mandatory for corporate shifting allowance reimbursements in most multinational corporations.
HSN and SAC Codes for Packers and Movers
Services under GST are classified using Service Accounting Codes (SAC), while physical goods use Harmonized System of Nomenclature (HSN) codes. Packers and movers services fall under Chapter 99:
| SAC Code | Service Description | Applicable GST Rate | Input Tax Credit (ITC) |
|---|---|---|---|
| SAC 996511 | Road transport services of goods by freight vehicles (GTA) | 5% | No ITC Available |
| SAC 996719 | Other cargo handling / specialized household packing & relocation services | 18% | Full ITC Available |
| SAC 996791 | Freight forwarding and logistics auxiliary services | 18% | Full ITC Available |
| SAC 997113 | Transit insurance facilitation for household goods and motor vehicles | 18% | Full ITC Available |
Reverse Charge Mechanism (RCM) in Moving Services
Under GST rules, Reverse Charge Mechanism (RCM) applies when the liability to pay tax is shifted from the supplier (the mover) to the recipient (the client). Here is how RCM operates in packers and movers transactions:
- For Individual Movers (B2C): RCM does NOT apply. The moving company charges GST on the invoice and remits it directly to the Government of India.
- For Registered Corporate Entities (B2B): When a registered corporate company (such as a Private Limited company, LLP, factory, or corporate body) hires a Goods Transport Agency under 5% GST, the tax liability falls under RCM. The corporate client pays the 5% GST directly to the government under their own GST portal filing. However, if the mover bills at 18% under composite relocation, the mover charges forward GST, allowing the company to claim input credit.
Checklist for Corporate Shifting Allowance & HR Reimbursement
If you are relocating for a job transfer and claiming shifting expenses from your employer (e.g., TCS, Infosys, Maruti Suzuki, Hero MotoCorp, banks, or defence establishments), HR and Finance teams require strict documentation to process your reimbursement:
Mandatory Documents Required for Shifting Reimbursement:
- Original Tax Invoice with GSTIN: Must feature the mover's valid GST number, registered address, invoice number, customer name matching company employment records, and clear SAC code (9965 or 9967).
- Consignment Note / Bilty (LR Copy): The official Lorry Receipt with driver's truck number, origin, destination, and stamped consignment details.
- Itemized Packing Inventory List: Complete stamped list of household goods and carton counts signed by the moving supervisor.
- Vehicle Condition Report (for Car/Bike): If transporting a car or two-wheeler, a pre-transit inspection sheet detailing odometer reading and body condition.
- Official Transit Insurance Policy Certificate: Stamped policy paper issued by a recognized general insurance provider (Oriental, New India, ICICI Lombard).
- Money Receipt with Payment Stamp: Official money receipt confirming full settlement via bank transfer or digital payment.
Why First Choice Guarantees 100% Tax & Corporate Compliance
Unlike unregistered local transporters who provide hand-written quotes without valid GST credentials, First Choice Packers and Movers operates as a registered corporate logistics entity. We provide:
- Digitally verified GST tax invoices with dynamic QR codes and verified SAC codes.
- Complete Bilty / LR sets with company seal and registration numbers.
- IBA-compliant documentation accepted across all public and private sector banks in India.
- Instant generation of verified transit insurance policies from nationalized insurers.