Packers and movers businesses handle the transportation of household, commercial and industrial goods, making GST compliance an important part of their operations. As per the Central Goods and Services Tax (CGST) Act, 2017, packing and moving services are treated as a supply of services under Section 7. Businesses providing these services are required to obtain GST registration when they are eligible as prescribed under Sections 22 and 24 of the CGST Act, 2017.
Understanding the registration process, eligibility requirements and documentation helps packers and movers operate compliantly, issue valid tax invoices and claim eligible Input Tax Credit (ITC).
When is GST registration required for packers and movers?
Here is what you need to know before applying for GST registration:
Understanding the services covered under GST
Recent GST changes have reduced the GST rate on certain paper-based packing materials to 5%. These include packing paper, cases, cartons and boxes made of corrugated or non-corrugated paper or paperboard, as well as paper pulp moulded trays. The lower rate may help reduce input costs for service providers.
When packing, loading, transportation, unloading and related services are naturally bundled and supplied together, they generally qualify as a composite supply, with the principal supply determining the applicable GST rate. Goods Transport Agency (GTA) services attract GST at 5% without ITC or 18% with full ITC under forward charge, depending on the option exercised by the GTA. Under the Reverse Charge Mechanism, the recipient pays GST at 5%, subject to the applicable conditions. Supporting services such as packing, loading and unloading are generally taxed at 18% when supplied independently rather than as part of a composite GTA service.
Checking eligibility under GST
Under Section 22 of the CGST Act 2017, service providers must have GST registration if their aggregate turnover is over ₹20 lakh or ₹10 lakh for notified special category states, in a financial year.
Also, businesses covered under Section 24 of the Act, such as those making interstate taxable supplies, must register irrespective of turnover. Others may choose voluntary registration under Section 25(3).
Meeting transportation requirements
Businesses engaged in transportation of goods should also comply with the E-Way Bill provisions where applicable. An E-Way Bill is required when the consignment value exceeds ₹50,000, under Rule 138 of the CGST Rules, 2017, subject to the conditions and exceptions.
Where transportation is provided as a GTA service, businesses should also determine whether the Reverse Charge Mechanism (RCM) applies under the relevant GST notifications. The responsibility of generating the E-Way Bill may lie with the supplier, recipient or transporter, depending on the transaction.
Claiming ITC
Packing and moving businesses registered under GST can claim ITC on business goods and services used for taxable supplies, subject to the conditions and restrictions under the CGST Act, Sections 16 and 17. To claim ITC, businesses are required to maintain proper tax invoices and records.
What are the documents required for GST registration?
The documents required for GST registration include:
|
Category |
Acceptable documents |
|
Proof of Constitution of Business |
Partnership Deed, Trust Deed, Certificate of incorporation, other document establishing the constitution of the business, Certificate of establishment and Registration certificate |
|
Photograph of Stakeholder |
Photo |
|
Photograph of Authorised Signatory |
Photo |
|
Proof of Appointment of Authorised Signatory |
Letter of Authorisation OR Copy of Resolution passed by BoD/Managing Committee and Acceptance letter |
|
Proof of Principal Place of Business |
Property Tax Receipt, Municipal Khata Copy, Electricity Bill, Rent/Lease Agreement, Consent Letter or Documents/Certificate issued by Government |
|
Proof of Additional Place of Business |
Property Tax Receipt, Municipal Khata Copy, Electricity Bill, Rent/Lease Agreement, Consent Letter or Documents/Certificate issued by Government |
What are the steps to register under GST for packers and movers?
The following is a step-by-step process to apply for GST registration online:
- Visit the GST portal: Open the GST portal and select Services, then Registration, followed by New Registration.
- Enter basic details: Select Taxpayer, choose the relevant State or Union Territory, then enter the legal name, PAN, mobile number and email address.
- Generate the Temporary Reference Number: Verify the mobile number and email using the OTP. After successful verification, the portal generates a Temporary Reference Number (TRN).
- Complete Form GST REG-01: Log in using the TRN and complete Part B of Form GST REG-01 as required under Rule 8 of the CGST Rules. Enter business details, principal place of business, additional places of business, bank account details and authorised signatory information.
- Upload required documents: Upload all the documents required in the prescribed format. Review the information carefully before submission.
- Verify and submit the application: Complete Aadhaar authentication where applicable or verify the application using an Electronic Verification Code (EVC) or a Digital Signature Certificate (DSC). Submit the application and save the Application Reference Number (ARN) for future tracking.
Conclusion
GST registration helps packers and movers to meet their tax obligations and run their business smoothly. Once registered, they must keep accurate and up-to-date GST records, as it becomes just as important as obtaining the registration itself.
TallyPrime can help businesses manage GST transactions and maintain organised records with ease. Start your free trial today and explore how it can support your GST compliance journey.
