Freight Insurance Services Under SAC Code 997136
Freight and travel insurance services provide protection for cargo in transit and for travellers on trips. Policies cover risks like loss or damage to goods and accidents or emergencies during travel. Under GST, such freight and travel insurance services are classified under SAC 997136. This SAC code and its GST treatment decide how GST applies on premiums for transit and travel related covers. These covers are useful for exporters, logistics users and frequent travellers.
Freight Insurance Services GST Rate for SAC Code 997136
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 997136, showing the standard 18 % slab for taxable insurance premiums and special cases where notified benefits apply.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 997136 | Freight insurance services & Travel insurance services | 18% with ITC | 18% with ITC | Freight and travel insurance (trip-related covers, baggage, etc.) remain at 18% with ITC. The new 0% exemption is targeted at individual life and health insurance only, so these non-life lines are unaffected. |
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.
Explore Other SAC Codes Under 9971
These SAC codes sit inside the financial and insurance services group 9971, which covers central banking, deposit services, credit granting, investment banking and various life and non life insurance products. Each six digit SAC identifies a specific set of financial or insurance activities for GST reporting.
Below are the major related six-digit SAC codes under parent 9971
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
Freight and travel insurance services under SAC 997136 provide protection for cargo and travellers. Premiums for such covers are usually taxable at 18 % with input tax credit for business buyers, while some personal covers may simply be treated as taxable retail services. Service providers should adopt SAC 997136 for these products, apply the proper GST rate in %, disclose GST clearly on invoices and maintain the same pattern in GST returns to support smooth compliance.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.
Frequently Asked Questions
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What is SAC code 997136 in GST for freight insurance?
SAC 997136 covers insurance services for goods in transit. It includes marine, inland transit and other cargo insurance policies that protect goods while they are being moved by road, rail, air or sea from one location to another.
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Does SAC 997136 cover cargo and travel related insurance for goods in transit?
Yes. Policies that insure goods during shipment, whether domestic or international, usually come under SAC 997136. These policies provide financial protection if goods are damaged, lost or stolen while being transported by various modes, including multimodal transport routes.
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What GST rate applies to freight insurance services under SAC 997136?
Freight and transit insurance services are generally taxable at 18% on the insurance premium. GST is charged on the premium billed to the owner of goods or logistics company that takes the policy. The value of the goods themselves is not taxed as part of this service.
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Should logistics companies use SAC 997136 for shipment insurance charges?
Yes. When logistics companies take insurance for customers or recharge cargo insurance premiums, they should classify such insurance services under SAC 997136. If they are acting as intermediaries, GST treatment will depend on whether they are principals, agents or simply recovering premiums on behalf of the insurer.
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Is ITC allowed on GST paid for SAC 997136 when freight is for business use?
Businesses transporting goods for taxable supplies or exports can generally claim ITC on GST paid for freight insurance premiums, subject to conditions. The policy must relate to business goods. Export related insurance may also support zero rated supplies, and such ITC is usually allowed under GST rules.