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Understanding the Impact of GST on Car Insurance
Oct 27, 2023

What is GST?

The impact of GST on car insurance plans in India has been mixed. On the one hand, the GST rate on car insurance is now 18%, which is higher than the previous service tax rate of 15%. Overall, the impact of GST on car insurance plans in India has been relatively minor. The increase in the cost of car insurance online has been offset by savings from the destination-based tax system. However, it is important to note that the GST rate on car insurance is still higher than the previous service tax rate. This means that policyholders should shop around for the best car insurance rates to ensure that they are getting the best possible deal.

What is GST?

GST stands for Goods and Services Tax. It is a comprehensive indirect tax system that was introduced in India in July 2017. GST has replaced several indirect taxes, including service tax, excise duty, and value-added tax (VAT). GST is a destination-based tax, which means that the tax is paid in the state where the goods or services are consumed. This contrasts with the previous system, where the tax was paid in the state where the goods or services were produced.

How does GST affect car insurance?

GST has affected car insurance in several ways. First, the GST rate on car insurance is now 18%, which is higher than the previous service tax rate of 15%. This has led to an increase in the cost of car insurance for policyholders. Second, GST is now a destination-based tax, which means that the tax is paid in the state where the car is registered. The overall impact of GST on car insurance has been limited. While it increases the cost of car insurance, the actual car insurance price can be lower due to several affecting factors. However, it is important to note that the GST rate on car insurance is still higher than the previous service tax rate. This means that policyholders should shop around for the best car insurance rates to ensure that they are getting the best possible deal.

How To Find The Best Car Insurance Rates?

If you are looking for car insurance online, there are a few things you can do to find the best possible rates:

- Compare quotes from different insurers

There are several car insurance companies in India. So, it is important to compare quotes from a variety of insurers to get the best possible rate.

- Consider your needs

When comparing quotes, it is important to consider your specific needs. For example, if you have an expensive car, you may need to purchase a comprehensive insurance policy. Claims are subject to terms and conditions set forth under car insurance policy.

- Watchout for No-Claim Bonus

One of the best car insurance benefits in a comprehensive plan is the no-claim bonus. If a claim is not filed by you during the policy term, the insurer rewards you with a concession on your premium during the policy renewal. You can claim concessions up to 50% on your premium for every consecutive claim-free year.  As a potential policy buyer, it is important that you remain vigilant and check the policy document for no-claim bonus. By following these tips, you can find the best possible car insurance for your needs and budget. In addition to the information above, it is important to know that car insurance rates depend on factors such as the type of car you drive, your driving record, your age and gender, your location, etc. By understanding these factors, you can make an informed decision about which policy is right for you.

Conclusion

The impact of GST on car insurance plans in India has been mixed. However, there are several things you can do to find the best possible car insurance rates. By following the tips above, you can ensure that you are getting the best possible deal on your car insurance. In addition to shopping around for the best rates, policyholders can also save money on car insurance by taking advantage of concessions. Many insurers offer markdowns in your premium for things such as good driving records, safety features, and membership in automotive associations. Policyholders can also enquire about the loyalty bonus if they have been with an insurer for a long time.   * Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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