Insurance Commission, Service Tax

[ajay singh]

Does taxability limit of Rs. 10 Lakh available to service provider or not?

 e.g. an Insurance Agent provides services to Insurance Company and his Insurance Commission from Insurance Business or other business where he/she provides services in below Rs. 10 Lakh (This income doesn’t include any Interest, Salary or Pension income. Or which incomes are to be included under Service Tax limit of Rs. 10 Lakh).

 1.       Can Insurance company charge the Service Tax and at what percentage?

2.       At which Commission Intial / renewal or both.

 I have few instances to Insurance companies charging service tax on commission of their agents however the percentage of charge varies from company to company

Posts / Replies

[PAWAN KUMAR]

As per my view, insurance company can charge service tax at the rate of 12.36 percent on the actual commission paid to insurance agent under reverse charge mechanism.