The GST (Goods and Services Tax) is the indirect tax introduced in India on 29th March 2017, thus replacing other indirect taxes like excise duty, services tax, VAT, etc. This tax is levied on the manufacture and distribution of the services and goods. It was one of the biggest tax reforms in India. This tax reform has also had a massive impact on the auto insurance industry, especially the two wheeler insurance market. Let us understand the impact of the introduction of the GST-based tax system on the two-wheeler market in India.
How does GST affect automobile insurance policies?
There are two types of bike insurance plans in India – comprehensive insurance and third-party insurance. Third-party insurance is a mandatory insurance policy that you are required to own by the law. The rates for third-party insurance are declared by the Insurance Regulatory and Development Authority of India (IRDAI) annually. These rates are based on the engine cubic capacity of the vehicle.
On the other hand, a comprehensive insurance policy promises much better coverage. It covers damages to the bike, theft of the bike, injuries to the owner, and it also includes the third-party cover. The rates for comprehensive cover are … Read the rest