| Instrument | Purpose |
|---|---|
| 06/2025-Central Tax (Rate) | Exempts the general insurer's contribution from third-party motor premiums to the Motor Vehicle Accident Fund (Section 164B, Motor Vehicles Act, 1988) from GST |
What this notification actually does
Every third-party motor insurance premium includes a component that insurers must contribute to the Motor Vehicle Accident Fund — a corpus used to compensate victims of hit-and-run accidents and to fund road-safety measures under Section 164B of the Motor Vehicles Act, 1988. Before this notification, the GST treatment of that specific contribution was not separately exempted. Notification 06/2025-Central Tax (Rate) adds this contribution to the exempt-services list, so the amount the insurer pays into the Fund is not itself treated as a taxable service. This does not exempt the third-party premium the policyholder pays — it exempts only the onward contribution the insurer makes to the Fund out of that premium.
Required source controls
- Exact notification number, date and Gazette copy
- Enabling section and recommendation basis
- Effective date and transition/savings
- Principal entry and all amendments
- CGST, IGST, UTGST and SGST counterparts
- Circular, judgment and AAR/AAAR treatment
Professional alert
Do not confuse this exemption (the insurer's contribution to the Motor Vehicle Accident Fund) with the GST treatment of the third-party motor premium itself, which is a separate question. Confirm the exact notification serial, effective date (1 April 2025) and the parallel IGST/UTGST notifications before applying this to a specific insurer's filing.
For the connected rule or filing step, see GST Services Rate Master.
Implementation example
An ERP tax code is not activated merely from the notification title. The reviewer stores the entry, HSN/SAC, description, conditions, tax component, effective dates and supporting evidence, then approves testing and deployment.
Finin2min Q&A
Can an HSN chapter determine the GST rate?
No. The exact heading, description, exclusions, conditions, notification entry and effective date must be matched.
Can a GST Council recommendation be applied directly?
No. Identify the implementing notification and commencement date.
Does a portal rate search replace classification?
No. It is an aid; the tariff, notification and evidence control the legal conclusion.
When should a rate page be indexed?
Only after exact current entry text, amendments, conditions, examples and reviewer approval are complete.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Official starting point
- www.gstcouncil.gov.in