GST on Car Insurance
GSTZone Desk · Updated 2026
Short answer
Motor (car) insurance premiums carry 18% GST, the standard rate for general insurance — and that hasn’t changed with the health and life insurance exemption introduced in September 2025.
In detail
It’s easy to assume insurance in general became GST-free after the widely reported September 2025 exemption — but that exemption was specifically carved out for health and life insurance premiums, not general insurance as a category.
Motor insurance, including your car’s own-damage and third-party cover, falls under general insurance, and continues to be taxed at the standard 18% rate that applies to most services.
The distinction matters when a business is trying to work out its input tax credit position too — GST paid on motor insurance for company vehicles follows the same blocked-credit rules as the underlying vehicle (Section 17(5)), so ITC on car insurance is usually blocked for the same reasons ITC on the car itself is blocked, unless the vehicle falls into one of the excepted business-use categories.
GSTZone tip
Don’t assume ‘insurance is exempt now’ applies to every policy you hold — check specifically whether it’s a health/life product or a general insurance product like motor, fire, or property cover before assuming GST-free treatment.
Related questions
What about two-wheeler insurance?+
Same treatment as car insurance — two-wheeler and other motor vehicle insurance is general insurance, taxed at the standard 18% rate.
Is health insurance for company employees exempt too?+
Group health insurance for employees generally falls under the same health insurance exemption introduced in the September 2025 reform, though it’s worth confirming the exact product classification with the insurer for a specific corporate policy.
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