Motor Insurance Under SAC Code 997134

Motor vehicle insurance services cover risk related to cars, bikes, trucks and other vehicles on the road. Policies may include own damage cover, third party liability cover or bundled motor insurance plans. Under GST, such motor vehicle insurance services are classified under SAC 997134. This SAC code and its GST treatment decide how GST applies on motor insurance premiums and add on covers.  Such covers are compulsory for third party liability and strongly advised for own damage protection.

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997134 SAC Code GST Rate

Review old and new GST rates for Motor Insurance under 997134 SAC Code.

Life, health, general and specialised insurance services under these codes are treated as insurance services under GST. In most standard policies, the premium charged to customers is subject to GST, while certain government notified schemes or social security type covers may enjoy concessional or exempt treatment.

After the September 2025 rationalisation, taxable insurance premiums for regular commercial and retail policies are generally placed in the 18 % slab with input tax credit for business policyholders, subject to specific conditions. Concessional or exempt treatments for selected life and health products continue as per the latest GST notifications and circulars.

The table below explains the broad GST treatment for SAC code 997134, showing the standard 18 % slab for taxable insurance premiums and special cases where notified benefits apply.

SAC Code

997134

Description

Motor vehicle insurance services

New Rate

18 %
Standard

Old Rate

18 %

Notes

General motor insurance (own damage, third-party, package policies) remains at 18% with ITC. The September 2025 rate rationalisation focused on life and health insurance, not on non-life motor insurance, so there is no specific rate change here besides the general confirmation that it stays in the 18% slab.

Insurers and intermediaries using this SAC code should split premium, GST and any stamp duty or other levies clearly on policy documents and invoices. They should mention the GST rate in %, use the correct SAC and ensure the same treatment is reflected in GSTR 1 and GSTR 3B so that business customers can manage input tax credit and compliance properly.

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Practical Classification Guidance

Banks, NBFCs, insurers and intermediaries should map each product to the correct SAC, checking whether the income is fee based and taxable or interest or risk cover that may have special treatment. Proper SAC selection and correct GST rate application in % reduce disputes, help customers claim input tax credit on eligible charges and keep GST returns easier to justify during audits.

Conclusion

Motor vehicle insurance services under SAC 997134 cover own damage and third party risks for vehicles. Motor insurance premiums are generally taxed at 18 % with input tax credit for qualifying business users, subject to normal credit rules. Insurers and agents should indicate SAC 997134, apply the proper GST rate in %, show GST separately on premium calculations and keep consistent reporting in GST returns so that both policyholders and authorities have clarity.

Frequently Asked Questions

Clear answers to common queries about SAC Code 997134 and GST compliance.

What is SAC code 997134 in GST for motor insurance?

SAC 997134 covers insurance services for motor vehicles, including cars, bikes and commercial vehicles. It includes third party liability policies and comprehensive covers sold by general insurers to vehicle owners or fleets for protection against damage and liability risks.

Does SAC 997134 cover insurance for cars, bikes and commercial vehicles?

Yes. All standard motor insurance policies issued for private cars, two wheelers, taxis, trucks and buses fall under SAC 997134. These policies provide cover for own damage, theft, fire and third party liabilities depending on policy type and options selected by the policyholder.

What GST rate applies to motor insurance premiums under SAC 997134?

Motor insurance premiums are generally taxable at 18% under GST on the premium component. GST is charged on both third party and comprehensive motor policies, and the insurer collects this tax from policyholders along with the base premium and any other applicable surcharges.

Are third party and comprehensive policies both billed under SAC 997134?

Yes. Whether the policy covers only third party liability or includes own damage also, it is still classified as motor insurance under SAC 997134. The GST rate typically remains the same on the taxable premium portion in both cases, as per general non life insurance rules.

Can businesses claim ITC on GST paid for commercial motor insurance?

Businesses can generally claim ITC on GST paid for insurance of commercial vehicles used for taxable supplies, like trucks for goods transport, subject to GST rules. For vehicles used mainly for personal transport of employees, ITC may be blocked, so companies must review eligibility carefully.

Important Disclaimer

The above does not constitute professional advice or a formal recommendation. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.