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GST Impact on Car Insurance

Ever since independence, the biggest tax reform to hit India till date is said to be the Goods and Service Tax (GST). After all, it is a landmark reform for the indirect tax regimen of the Indian economy. But despite the eradication of double taxation on the sale of goods and services in the country, all industries including the car insurance online industry are affected. GST not only impacts auto insurance companies but even influences the policyholders. Here is what the impact of GST does to your car insurance.

Comprehensive Motor Insurance
Any auto insurance policy that falls under the wide spectrum of general insurance comes in two variants. Comprehensive motor insurance is one of these variants. If you purchase a comprehensive motor insurance policy, you obtain a cover for third party liability along with a cover for any damage that is caused to your vehicle.

Third Party Motor Insurance
Third party motor insurance forms the second variety of auto insurance. In this case, you can get coverage against third party liability only when any kind of damage or destruction is caused to a third party by your vehicle. 

GST and Car Insurance
GST levied on the premiums of car insurance policies will result in an increase in the premiums. GST on these premiums has increased from 15% to a flat 18%. This makes the premiums more costly. If you are getting your auto insurance policy renewed of lately, you have to pay marginally more on your car insurance premiums. In addition to this, the impact of GST has also increased the competition in the auto insurance sector.

What Can You Do About It?
Motor insurance premiums with a service tax of 15% earlier, is now hiked by 3%. This hike is passed on to the final customer who has to pay the premium amount. The amount you eventually pay for is determined by the kind of auto insurance policy you choose.

Although it is a well-known fact that implementation of GST on all goods and services make purchasing auto insurance a slightly expensive affair. Nevertheless, you cannot avoid insuring your vehicles. The best road to take in this situation is careful research.

Compare the various car insurance online schemes and policies, making a detailed list of each of them. Check out the advantages and discounts offered as well as the premiums that you need to pay. See if they blend with your requirements seamlessly. Do not keep the premium amount as the only condition for concluding on the right auto insurance policy for you. Check the inclusions, exclusions and car insurance policy benefits offered. Rather than overlooking the effect of GST, view it from a broader perspective. After all, one of the primary objectives of this tax is to make the existing tax structures in India which have been present for decades, a lot more simpler.
GST Impact on Car Insurance GST Impact on Car Insurance Reviewed by Jhon on 3:56 AM Rating: 5