Third-Party Goods Carriage Insurance GST Cut to 5% From September 2025
Third-party insurance for goods carriage vehicles is now taxed at 5% GST with input tax credit, down from the standard 18% rate.
News · 1 min read · Published 24 July 2026
Written by Arjun Malhotra, Cars Editor
Highlights
- Third-party insurance of goods carriage vehicles is now taxed at 5% GST with input tax credit
- This is a notable exception to the standard 18% GST that applies to most other vehicle insurance
- The change took effect from September 22, 2025
Third-party insurance of goods carriage is a specific exception to the standard vehicle insurance GST rate, now taxed at 5% with input tax credit from September 22, 2025 — a meaningful reduction from the 18% rate that applies to most other vehicle insurance categories. This targeted cut appears aimed at easing costs for commercial goods transport operators specifically.
For fleet operators and logistics businesses, this lower rate combined with input tax credit eligibility can meaningfully reduce the effective cost of mandatory third-party cover on goods carriage vehicles compared to before the change.
Owners of goods carriage vehicles should confirm with their insurer that this reduced rate is being correctly applied to their third-party premium calculations.