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Liability of service tax on brokerage, Service Tax |
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Liability of service tax on brokerage |
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We are life insurance brokers. We receive brokerage from life insurance companies and bill the service tax over and above the brokerage. What is the law. Who should pay the service tax. Posts / Replies Showing Replies 1 to 2 of 2 Records Page: 1
In your case of insurance agency business, the relevant life insurance company receiving the service is liable to pay service tax. Ref - Sec.68(2)of Finance Act,1994 read with Rule 2(1)(d)(iii) of Service tax Rules,1994.
As per rule 2(d)(iii) of the Service Tax Rules, in case of Insurance Agent, the insurance company shall be liable to pay service tax. Insurance agents are not liable to pay service tax. However, this provision is not applicable to persons who are not insurance agents.
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