There are various sizes of vehicles, ranging from heavy-duty trucks to small commuter cars. The wide range of car designs is matched by the diversity of risk factors that affect insurance premiums. Insurers rely on intricate systems to categorise the various makes, models, and characteristics of cars on the road today to accurately assess these risks, ranging from IDV in car insurance to many other factors.
The car insurance industry is based on classification codes used for policy underwriting, claim reviews, and other critical business operations. This article will examine the significance of vehicle HSN codes in the insurance industry. Understanding the specifics can be beneficial when purchasing third-party car insurance online. Claims are subject to terms and conditions set forth under the motor insurance policy. *
A HSN Code: What Is It?
The Harmonised System of Nomenclature (HSN) globally categorises traded goods and services for seamless international movement. Managed by the World Customs Organisation, the vehicle HSN code aims to standardise product descriptions worldwide. These eight-digit alphanumeric ‘HSN codes’ uniquely identify various traded products, fostering international standardisation crucial for trade policy, logistics, and taxation.
HSN Codes’ Significance In Insurance
The vehicle HSN code provides a standardised classification for insurance services, streamlining communication among insurers, policyholders, and regulators. It also supports accurate record-keeping and tax compliance.
It is possible to accurately ascertain applicable GST rates for car insurance by classifying coverage types using the HSN code. They also assist insurance companies in keeping accurate tax records and methodically organising policies.
HSN Code For Car Insurance
Vehicle insurance falls under “General Insurance Services” in India’s Goods and Services Tax (GST) system, with the standard HSN code being 9971 for motor policies. Accurate use of this code is essential for billing and reporting by insurance companies.
HSN Code For Vehicle Insurance Components
- The main code, 9971, is General Insurance Services.
- Subcategory 99713 serves as a means of identifying Motor Vehicle Insurance Services.
Why Are HSN Codes For Car Insurance Important?
Record-Keeping And Documentation
Policies can be consistently categorised by vehicle HSN code, resulting in standardised records over time. This makes audits for insurance companies more transparent and easier.
Analysis Of Data
HSN codes facilitate data analysis for insurance companies, enabling insights into consumer, market, and profitability trends. They also assist regulatory agencies in monitoring the industry for informed decision-making.
Fitness For Taxation
Complying with tax obligations is easier when vehicle insurance is purchased using the correct HSN code. It guarantees that taxes are correctly computed and paid in compliance with laws. **
Assessment Of Taxes
HSN codes determine the GST rates that apply to motor policies. Insurance companies can more accurately calculate and pass along taxes due to customers when the appropriate code is applied. You can utilise a car insurance premium calculator to estimate the costs of premiums to be paid. **
Make sure you carry out the process of car insurance renewal on time. Accurate classification and taxation of vital services like vehicle insurance are ensured through HSN codes, with vehicle policies falling under HSN 99713, categorised as General Insurance Services. Strict adherence to this identifier streamlines processes fulfills compliance obligations, and enables precise tax calculations by insurance providers.
*Standard T&C Apply
**Tax benefits are subject to change in prevalent tax laws.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
