4 min read
Updated on Sep 30, 2022
Wondering about attaching GST on Car Insurance Policy ??? When you have a car, life becomes much easier. Whether it is about exploring the city on weekends or visiting nearby places or simply commuting to work, nothing seems difficult as a vehicle owner. However, buying a car is not a child’s play as even the cheapest car will cost you a lot. Once you decide to buy it, you need to ensure that you are protecting the vehicle from all kinds of risks. Although it is not in our hands to always prevent a road accident or a natural calamity; all that we can do is buy a vehicle insurance policy so that we can be prepared for the financial losses that may arise out of damage to your car.
Owning a car insurance policy means having protection for your vehicle against unforeseen risks including third-party liability and own damages resulting from the car. If your car causes property damages or even physical injury to a third party, third-party liabilities arise. If your car is not insured yet, you may have to face a penalty for violating the law.
In India, when we purchase something, we must pay GST or Goods and Services Tax. Therefore, when you buy one such plan, you have to pay GST on car insurance as well. To know how much GST is applicable on car insurance plans, please keep reading.
Commonly called GST, Goods and Services Tax is a single indirect tax. It is applied to the sale of goods and services throughout India. It is a combined system of indirect taxes that replaces around 17 taxes including service tax, luxury tax, Value Added Tax (VAT), Central Sales Tax (CST), central excise duty, and many more. These are applied by the central as well as state governments.
The Goods and Service Tax Act was passed in the parliament in March 2017 and with that GST came into effect on 1st July 2017. Ever since then any tax applied by the state government or central government on the sale of goods and services is converted into GST.
GST further is divided into CGST and SGST. CGST means Central GST, which is collected by the central government, while SGST or State GST is collected by the state. Apart from this, the central government also collects Integrated GST or IGST. IGST is applied when goods and services between states are exchanged.
KNOW MORE : How Does GST Impact Your Insurance Premium?
GST number or Goods and Services Tax Identification Number (GSTIN) is basically a unique identification number that is assigned to a person or a business that is registered under the GST Act. Mainly the tax authorities use the GSTIN for maintaining records of GST dues as well as payments of all of them who are registered under the GST Act. The earlier taxpayer identification system like the Tax Identification Number (TIN) has now been replaced by the GST number. TIN was used by the state tax authorities as it helped in tracking state tax records like VAT.
All the businesses that were earlier registered under systems such as TIN have now been automatically migrated to the GSTIN system and they also received their new GST number. As the GST rules state, all the businesses that are GST registered have to print the GSTIN on all GST Invoices that are provided by them to the customers.
When you purchase a car insurance policy, GST is needed as you are buying a service. However, you do not need to pay GST separately as it is included in the premium amount. Therefore, when you are paying the car insurance premium, you need to know it all-inclusive.
Currently, when you buy a car insurance policy, a GST of 18% is applicable. As compared to the pre-GST period, this is 3% higher. Back then, 15% tax used to be applied on the car insurance plans. In the 15%, 14% was service tax and 0.5% was each Krishi Kalyan Cess and Swachh Bharat Cess.
It is a major confusion among many people whether they can add GST number to the car insurance policy or not. This number is based on your PAN and you can use it to file your GST returns. And you can certainly do it by attaching GST number to a car insurance policy . The only thing that you have to do is getting in touch with the customer care of the insurance company from where you bought your motor insurance. You can also contact an insurance broker to get your GST number added to the motor insurance policy you bought.
After GST has been introduced in India, the entire indirect tax system has become more streamlined and simple. The only problem that has happened after GST was introduced is that the overall car insurance premium has increased. However, you can claim GST by filing your GST returns.
Now, if you are planning to buy a car, make sure you choose the right motor insurance policy as well.
Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.
View this post on Instagram
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
Table of Content Types of Car Insurance Policies Bharti AXA Policy Download - Steps to Consider Is the hard copy of the Bharti AXA car.
Table of Content Third Party Car Insurance Benefits of Third-Party Car Insurance Own Damage Insurance for Car Why Should You Buy Own Damage Car Insurance:.
There are several Misconceptions About Voluntary Deductibles in Car Insurance Policy. Clearing the misunderstanding pertaining to this commonly used terminology in car insurance in this.
With everything around us being driven by technology, why should insurance be any exception? The Indian insurance sector is soon catching up with telematics solutions.
Have you ever considered a situation when the passengers of a four wheeler may suffer injury due to an accident. Is there a passenger cover.
Consumables Add-On Cover in Car Insurance Policy - Why You Should Buy Them You would do anything to maintain the dream car that you purchased,.
Long-Term Car Insurance Policy Advantages and Benefits Do you know buying a long-term car insurance policy can get you more benefits than buying regular yearly.
Does Your Driving Behavior Also Affect the Premium of Your Car Policy? Do you know that your car insurer can charge you a premium depending.
Speak to our advisor
Corporate Office : Mahindra Insurance Brokers Ltd ( A Mahindra Group Company ) Sadhana House, Ground Floor, 570 P. B. Marg, Behind Mahindra Towers, Worli, Mumbai 400018.
Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).
Insurance is the subject matter of solicitation.
For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.
Copyright © 2022 Mahindra Insurance Brokers. All Right Reserved.