The 55th GST Council meeting held on 21st Dec 2024 at Jaisalmer, has been chaired by Finance Minister Nirmala Sitharaman.
One of the main decisions opted for was to waive the GST on the contributions incurred via the general insurance companies from the third-party motor vehicle premiums to the Motor Vehicle Accident Fund ( MVA Fund ).
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Under Section 164B of the Motor Vehicles Act, 1988 The MVA Fund, created has the motive to furnish the compensation and cashless medical treatment to victims of road accidents, along with hit-and-run cases. The insurance companies contribute to this fund by using part of the premiums they obtained for third-party motor vehicle insurance.
Within the law for all vehicles, third-party insurance is needed and the premiums collected by the insurance companies comprise a share set aside for the MVA fund. It assists in ensuring that the fund has sufficient resources to support the accident victims.
The decision of the GST council to waive the GST on such contributions was incurred to lessen the financial load on the insurance companies. The MVA Fund is devoted to public welfare, so the government does not wish to charge GST on the money going into it. The same waiving off assures that the insurance companies can contribute more to the fund without additional tax.
The very decision assists the efforts of the government to ensure that the accident victims get help on time, particularly in matters where the responsible party couldn’t discovered. Through GST waiving on such contributions, the government ensures that the MVA fund stays well-funded and can furnish significant assistance to those required.
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Union Minister of State for Finance, Shri Pankaj Chaudhary, Ajay Seth ( Revenue Secretary) along with Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, and Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana attended the meeting.
