To buy a bike, you’ll need to put a significant amount of money aside. When you bring your bike home, you take on a responsibility. Because you never know when an accident or natural disaster will occur, That’s why You must get a bike insurance policy to protect your bike from such unexpected events. On the other side GST is another good factor while you purchase a bike. So you need to know how can you add gst number to your bike insurance.
A two-wheeler insurance coverage protects the bike owner financially in the event of such unanticipated events. According to the Motor Vehicle Act 1988, bike owners are required to obtain third-party liability insurance, but it is also advised that they purchase a complete insurance plan. Because a third-party liability insurance policy only provides financial protection against third-party responsibility, whereas a complete policy covers the bike owner, third parties, as well as natural disasters, theft, and other risks.
When you buy something, you must pay the Goods and Service Tax (GST) (GST). In the same way, when you buy a bike insurance policy, you must pay the GST.
You’re probably wondering how much GST will apply to your insurance policy. That’s what we’re here to tell you. But first, let us go into GST in a little more detail.
Goods & Service Tax (GST)
GST is a single indirect tax levied across the country on the sale of goods and services. GST is a unified indirect tax system that replaces approximately 17 indirect taxes. It has taken the place of state and federal taxes such as the value added tax (VAT), central sales tax (CST), and central excise duty.
GST went into force on July 1, 2017. In March 2017, the Goods and Services Tax Act was passed by the parliament. GST is divided into two parts: CGST and SGST. The amount of tax collected by the central government is CGST, whereas the amount collected by the state government is SGST. If the goods and services are traded across states, the central government collects the IGST (Integrated GST).
The tax rates on which products and services are sold were set by the GST. GSTs of 0%, 5%, 12 percent, 18 percent, and 28 percent are included depending on the sort of products and services you purchase.
Get applicable on bike insurance
Because you’re buying a service, when you buy a 2-wheeler insurance coverage, you’ll have to pay GST. The GST is already factored into the higher price. The GST is included in the insurance price you pay for your motorcycle insurance.
The purchase of bike insurance is subject to an 18 percent GST. It used to be 15% since you had to pay separate indirect taxes. The 15% tax is made up of 14 percent service tax and 0.5 percent Krishi Kalyan Cess and Swachh Bharat Cess, respectively.
But how does the increase in the indirect tax affect the cost of your bike insurance?
The impact of GST on bike insurance premium
The increase in the tax rate from 15% to 18% has no negative impact on the premium. The insurance firm has passed the GST payment on to the bike owner. The 3% tax increase has had an influence on the overall bike insurance premium that the bike owner must pay.
Here’s an example:
Assume your motorcycle insurance premium is Rs. 5000. If you apply the old 15% tax to the premium, it comes to 750. As a result, you will be required to pay a bike insurance premium of $5750. However, following the GST, when 18 percent is applied to your Rs. 5000 bike insurance, you will have to pay Rs. 5900.
As a result, you’ll have to pay a total of Rs. 5900 in bike insurance premiums. As a result, the total increase in your motorcycle insurance would be Rs. 150.
This is how the addition of GST results in a higher insurance premium
The insurance firms, on the other hand, compensate for the increase in bike insurance premiums. They provide additional perks and coverage. Some insurance companies, for example, include roadside assistance as part of a standard coverage.
Is it possible to include a GST number on a bike insurance policy?
Many customers wonder if they can include their GST number in their motorcycle insurance policy. It is a 15-digit number that is unique and given to anyone who has registered for the Goods and Services Tax as well as calculated using that person’s PAN number and can be utilized to make a GST return.
People who run enterprises must obtain a GST number. These individuals are qualifying taxpayers who are entitled to a refund of the GST they have paid.
Is it possible to add a GST number to bike insurance, to answer the question?
Yes, the GST number can be added to the 2-wheeler insurance policy. To get the GST number added, simply contact your insurance company’s customer service representative.
To Conclude
The introduction of GST has streamlined and made the entire taxing structure more understandable. The 3% boost, on the other hand, has increased the cost of bike insurance coverage. However, by completing GST returns, you can claim the GST amount. You can add your GST number to your bike insurance policy to file returns if you have one.
