The Ministry of Finance, via Notification No. 06/2025 dated January 16, 2025, introduced huge amendments to the Goods and Services Tax ( GST ) structure, effective April 1, 2025. These changes were proposed during the 55th GST Council meeting and are now formalized by the Ministry of Finance by announcing GST exemptions for Motor Vehicle Accident Fund Insurance and NSDC-approved training partners.
The amendments aimed at clarifying tax applicability and improving public welfare, modify the provisions of the existing Notification No. 12/2017-Central Tax (Rate).
The GST tariff now includes a new entry, 36B. This exempts from tax the insurance services provided by the Motor Vehicle Accident Fund constituted under Section 164B of the Motor Vehicles Act, 1988. The fund supports third-party motor vehicle insurance claims, and its contributions, sourced from insurance premiums, will now attract a GST rate of NIL.
| (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 | |
Training partners approved by the National Skill Development Corporation (NSDC) have been included under Entry 69 of the GST tariff list. This move reinforces the government’s commitment to fostering skill development across the country.
In Entry 25A, the phrase “transmission and distribution” has been updated to “transmission or distribution,” clarifying the scope of services eligible under this provision.
The principal Notification No. 12/2017 – Central Tax (Rate) was originally published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), under G.S.R. 691(E), dated June 28, 2017. The notification underwent its most recent amendment via Notification No. 08/2024 – Central Tax (Rate), which was published in the Gazette of India, Extraordinary, under G.S.R. 620(E), dated October 8, 2024.
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