The 55th GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in Jaisalmer, Rajasthan, today. The council recommended the GST exemption on contributions by general insurance companies from third-party motor vehicle premiums for motor vehicle accident fund.
The council has recommended to exempt GST on the contributions made by general insurance companies from the third-party motor vehicle premiums collected by them to the Motor Vehicle Accident Fund, constituted under section 164B of the Motor Vehicles Act, 1988. This fund is constituted for providing compensation/ cashless treatment to the victims of road accidents including hit and run cases.
Section 164B of the Motor Vehicles Act, 1988 empowers the Central Government to set up the Motor Vehicles Accident Fund. The fund’s purpose is to provide compulsory insurance to all road users in India.
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