GST Council proposes GST exemption on third-party motor premiums for Accident Fund
The 55th GST Council meeting exempted GST on contributions made by general insurance companies from third-party motor vehicle premiums to the Motor Vehicle Accident Fund, enhancing support for road accident victims while easing the financial burden on insurers
The Union Finance Minister Nirmala Sitharaman chaired the 55th meeting of the GST Council today (21st December 2024) at Jaisalmer, Rajasthan. One of the main decisions taken was to exempt GST on the contributions made by general insurance companies from the third-party motor vehicle premiums to the Motor Vehicle Accident Fund ( MVA Fund ). Complete Supreme Court Judgment on GST from...
The Union Finance Minister Nirmala Sitharaman chaired the 55th meeting of the GST Council today (21st December 2024) at Jaisalmer, Rajasthan.
One of the main decisions taken was to exempt GST on the contributions made by general insurance companies from the third-party motor vehicle premiums to the Motor Vehicle Accident Fund ( MVA Fund ).
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The MVA Fund, created under Section 164B of the Motor Vehicles Act, 1988, aims to provide compensation and cashless medical treatment to victims of road accidents, including hit-and-run cases. Insurance companies contribute to this fund by using a portion of the premiums they collect for third-party motor vehicle insurance.
Third-party insurance is required by law for all vehicles, and the premiums collected by insurance companies include a share set aside for the MVA Fund. This helps ensure that the fund has enough resources to support accident victims.
The GST Council’s decision to exempt GST on these contributions was made to reduce the financial burden on insurance companies. Since the MVA Fund is dedicated to public welfare, the government does not want to impose GST on the money going into it. This exemption ensures that insurance companies can contribute more to the fund without the added cost of tax.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
This move supports the government’s efforts to ensure that accident victims receive timely help, especially in cases where the responsible party cannot be identified. By exempting these contributions from GST, the government ensures that the MVA Fund remains well-funded and able to provide essential support to those in need.
The meeting was attended by Union Minister of State for Finance, Shri Pankaj Chaudhary, Ajay Seth ( Revenue Secretary) along with Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, and Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana.
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