GST has been a matter of great concern ever since its implementation. But there is a sense of relief for those buying a new car. If you have plans to buy a new car or any bike, motorcycle or any two-wheelers, this news shall be important for you as the sources have it that the car and two-wheeler insurance can go cheaper. Third Party insurance might be put under consideration for reducing GST rates in the next meeting of the GST Council. Currently, there is an 18 per cent GST implemented in third party insurance.
The meeting shall be held in Delhi on 22nd December where the measures for the reforms shall be taken. The reduction of third-party GST shall be decided in this gathering of ministers and authorities. The truck owners have been asking for the complete elimination of GST on third party insurance for long.
The Insurance Regulatory and Development Authority of India (IRDA) has mentioned that it shall not be making any amendments in the third party insurance premium in case of motor vehicles from 2020-2021. This decision is taken every year. Now the insurers will be able to set up the premium on their own. This will benefit the customers in the long run because the insurance companies shall launch affordable and cheaper plans to attract the customers which shall result in reduced premium.
In the current situation, the insurance regulator sets the premium for the third party insurance cover. It is mandatory for every vehicle to have a third party insurance cover and so the transporters have been demanding for long that the IRDA lower the premium limit. This reform shall provide more alternatives to the policy buyers.
After the recent hike in the insurance cost, this is a sign of relief for many. A few months ago the IRDA had announced that the third party insurance cover needs to be bought for 3 years for a car and 5 years for a two-wheeler. This has been applicable since September 2018. The further blow was that the IRDA had also mentioned that the under the motor insurance policies the owner-driver cover shall be increased from 2 Lakh to 15 Lakh. This shall add up the cost from the premium charge of Rs 100 for cars to Rs 750 now.
Therefore now buying a car insurance has become a rather cumbersome process and post-January you may find some relief but do refer quotes from different insurers to be sure before making any decisions.