The SAC code for motor vehicle insurance services is 997134. The general GST rate is 18%, while third-party insurance for goods carriage vehicles attracts 5% GST under the revised rates effective from 22 September 2025.
Motor vehicle insurance is classified under SAC (Services Accounting Code), not HSN, because insurance is a service. The classification covers insurance against vehicle damage, theft and third-party liability. <Cite refs={[“turn650985search24″,”turn650985search25″,”turn916366search24”]}/>
What Is the SAC Code for Motor Vehicle Insurance Services?
Motor vehicle insurance falls under SAC 997134 – Motor Vehicle Insurance Services, within heading 9971 for financial and related services.
| Particular | Details |
|---|---|
| Service | Motor vehicle insurance services |
| SAC code | 997134 |
| SAC group | 99713 – Insurance and pension services |
| SAC heading | 9971 – Financial and related services |
| General GST rate | 18% |
| Third-party insurance for goods carriage | 5% |
| Classification type | SAC, not HSN |
SAC 997134 covers insurance policies relating to motor vehicles, including cars, motorcycles, commercial vehicles and goods carriers.
Types of Motor Vehicle Insurance Covered Under SAC 997134
The same SAC code applies to different motor insurance products, although the GST rate may differ for certain policies.
| Insurance service | Coverage | SAC code |
|---|---|---|
| Private car insurance | Insurance against vehicle damage and third-party liability | 997134 |
| Two-wheeler insurance | Insurance for motorcycles and scooters | 997134 |
| Commercial vehicle insurance | Insurance for taxis, buses, trucks and other commercial vehicles | 997134 |
| Third-party motor insurance | Legal liability arising from insured vehicle use | 997134 |
| Comprehensive motor insurance | Own-damage and third-party coverage | 997134 |
| Standalone own-damage insurance | Damage or loss involving the insured vehicle | 997134 |
| Goods carriage motor insurance | Insurance for trucks and other goods-carrying vehicles | 997134 |
The applicable GST rate depends on the policy and the specific insurance service provided.
GST Rate on Motor Vehicle Insurance Services in India
Most taxable motor vehicle insurance services attract 18% GST. However, a separate concessional rate applies to third-party insurance for goods carriage vehicles.
| Type of insurance | GST rate |
|---|---|
| Private car insurance | 18% |
| Two-wheeler insurance | 18% |
| Comprehensive motor insurance | 18% |
| Standalone own-damage insurance | 18% |
| Commercial vehicle insurance, generally | 18% |
| Third-party insurance of goods carriage vehicles | 5% |
The GST Council’s September 2025 rate changes reduced GST on third-party insurance of goods carriage vehicles from 12% to 5%. This concession does not automatically extend to every commercial vehicle policy or comprehensive motor insurance product. <Cite ref=”turn916366search24″/>
GST on Private Car and Two-Wheeler Insurance
Insurance premiums for private cars, motorcycles and scooters generally attract 18% GST.
For example, a car owner purchasing a comprehensive insurance policy usually pays GST on the taxable premium charged by the insurer.
For an intra-state supply, the tax is generally divided into 9% CGST and 9% SGST. For an inter-state supply, 18% IGST generally applies, subject to place-of-supply rules.
GST on Commercial Vehicle Insurance
Commercial motor insurance covers vehicles used for business activities, such as taxis, buses, delivery vans and trucks.
The general GST rate is 18% for taxable commercial motor insurance services.
However, the specific service of third-party insurance for goods carriage vehicles attracts 5% GST under the revised rate provisions.
GST on Third-Party Insurance for Goods Carriage Vehicles
Third-party insurance protects against covered legal liabilities arising from the use of an insured vehicle.
For goods carriage vehicles, the applicable GST rate on the specified third-party insurance service is 5%.
This rate should not be confused with the GST rate on comprehensive insurance or standalone own-damage insurance.
Businesses should check the insurer’s policy schedule and premium breakup to identify the applicable tax treatment.
GST Calculation Example for Motor Vehicle Insurance
Suppose a business purchases a motor insurance policy with a taxable premium of ₹20,000 and the applicable GST rate is 18%.
| Particular | Amount |
|---|---|
| Insurance premium | ₹20,000 |
| GST at 18% | ₹3,600 |
| Total payable | ₹23,600 |
For an intra-state supply, GST consists of ₹1,800 CGST and ₹1,800 SGST.
For an inter-state supply, ₹3,600 IGST generally applies.
Example: Third-Party Insurance for Goods Carriage
Suppose a transport business purchases a qualifying third-party insurance policy for a goods carriage vehicle.
| Particular | Amount |
|---|---|
| Insurance premium | ₹10,000 |
| GST at 5% | ₹500 |
| Total payable | ₹10,500 |
This example applies only when the insurance service qualifies for the specified 5% rate.
Difference Between Motor Vehicle Insurance and Related Insurance Services
Insurance services are classified according to the risk covered and the nature of the insurance contract.
| Insurance service | SAC code |
|---|---|
| Motor vehicle insurance services | 997134 |
| Accident and health insurance services | 997133 |
| Marine, aviation and other transport insurance services | 997135 |
| Freight insurance and travel insurance services | 997136 |
| Other property insurance services | 997137 |
| Motor vehicle reinsurance services | 997143 |
For example, an insurance policy covering damage to a truck generally falls under SAC 997134.
A separate policy covering goods or cargo against loss during transportation may fall under SAC 997136.
Businesses should distinguish vehicle insurance from freight insurance because they protect different risks.
The official GST classification separately identifies these services. <Cite refs={[“turn650985search24″,”turn650985search26”]}/>
Is Input Tax Credit Available on Motor Vehicle Insurance?
Input Tax Credit (ITC) on motor vehicle insurance depends on the type of vehicle, its use and the restrictions under Section 17(5) of the CGST Act.
For example, ITC on insurance relating to certain passenger motor vehicles may be blocked unless the vehicle is used for a qualifying purpose, such as further supply of vehicles, passenger transportation or driving instruction.
For eligible business vehicles, such as qualifying goods carriage vehicles, ITC may be available subject to the general GST conditions and applicable restrictions.
The availability of ITC should not be determined solely by the SAC code or the GST rate charged.
Businesses should verify vehicle eligibility and maintain the relevant insurance documents before claiming ITC.
How to Identify the Correct SAC Code for Motor Insurance
To classify motor vehicle insurance services correctly, businesses should review the insurance policy and identify the principal coverage.
For policies covering motor vehicle damage, theft or third-party liability, SAC 997134 generally applies.
If the insurance covers goods transported in a vehicle rather than the vehicle itself, a different classification may apply.
Businesses should also check whether the policy qualifies for a specific GST rate, such as the 5% rate on third-party insurance for goods carriage vehicles.
The SAC classification can be verified using the official GST Portal’s HSN/SAC search facility.
FAQs About Motor Vehicle Insurance SAC Codes
What is the SAC code for motor vehicle insurance services?
The SAC code for motor vehicle insurance services is 997134. It covers insurance policies protecting against risks associated with motor vehicles.
What is the GST rate on car insurance?
Car insurance generally attracts 18% GST on the taxable insurance premium.
What is the GST rate on third-party insurance for trucks?
Qualifying third-party insurance for goods carriage vehicles attracts 5% GST, effective from 22 September 2025.
Is the SAC code for two-wheeler insurance different from car insurance?
No. Both two-wheeler and car insurance services generally fall under SAC 997134.
Can businesses claim ITC on motor vehicle insurance?
ITC eligibility depends on the vehicle category, business use and restrictions under Section 17(5) of the CGST Act. Not every business motor insurance premium qualifies for ITC.
Maintain Accurate Business Expense Records with myBillBook
Businesses operating delivery vehicles, trucks or other commercial vehicles need to maintain accurate records of insurance premiums, operating expenses and customer transactions.
Using myBillBook’s accounting software, businesses can organise their financial records alongside day-to-day billing activities.
For businesses involved in vehicle servicing and repairs, understanding the applicable automotive repair service classification can also help distinguish repair charges from insurance premiums.
