Background:
The 55th GST Council Meeting held on December 21, 2024, recommended exemption from GST on the contributions made by general insurance companies from the third-party motor vehicle premiums collected by them to the Motor Vehicle Accident Fund, constituted under section 164B of the Motor Vehicles Act, 1988. This fund is constituted for providing compensation/ cashless treatment to the victims of road accidents including hit and run cases.
Now:
The CBIC vide Notification No. 06/2025-Central Tax (Rate) dated January 16, 2025 exempts the supply of services of insurance provided by the Motor Vehicle Accident Fund, constituted under section 164B of the Motor Vehicles Act, 1988 (59 of 1988), against contributions made by insurers out of the premiums collected for third party insurance of motor vehicles.
(B) after serial number 36A and the entries relating thereto, the following serial numbers and entries shall be inserted, namely:
| (1) | (2) | (3) | (4) | (5) |
| “36B | Heading 9971 or Heading 9991 | Services of insurance provided by the Motor Vehicle Accident Fund, constituted under section 164B of the Motor Vehicles Act, 1988 (59 of 1988), against contributions made by insurers out of the premiums collected for third party insurance of motor vehicles. | Nil | Nil” |
Similar notifications have been passed under the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) and the Union Territory Goods and Services Tax Act, 2017 (“the UTGST Act”).
The Notifications can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/01/CBIC-N.No_.-06_2025-CUI-Rate.pdf
