Tribunal Allows Appeal: Commission Agent Exempt from Service Tax Under Notification No. 3/2000-ST for Govt Insurance Schemes.

The appellant's appeal was allowed by the Tribunal, which set aside the impugned order. It was determined that the appellant, acting as a Commission Agent for premium collection under government insurance schemes, was eligible for exemption under Notification No. 3/2000-ST. Consequently, the appellant was not liable to pay service tax on the commission received.

---

---

Issues involved:
The issue involves the liability to pay service tax on the commission received from M/s. Agriculture Insurance Company of India Limited under the category of Business Auxiliary Service, and the applicability of Notification No. 3/2000-ST dated 06.07.2000 for exemption.

Liability to pay service tax on commission received:
The appellant received commission on the collection of premium of Crop Insurance Service from M/s. Agriculture Insurance Company of India Limited. The department contended that the appellant is liable to pay service tax on the commission received under the category of Business Auxiliary Service. The demand of service tax was confirmed and upheld by the learned Commissioner (Appeals), leading to the filing of the present appeal.

Applicability of Notification No. 3/2000-ST for exemption:
The appellant argued that their service is exempted under Notification No. 3/2000-ST dated 06.07.2000, which exempts taxable services in relation to general insurance business provided under specific government schemes. The appellant contended that the commission received from clients on insurance premium and related activities falls under the exemption, as it is in relation to the specified insurance schemes. The appellant pointed out that in a similar case, the Additional Commissioner had dropped proceedings on identical grounds.

Judgment:
After considering the submissions and examining the facts, it was found that the appellant provided services as a Commission Agent for the collection of premium in relation to insurance under the Government's various schemes. The lower authorities had demanded service tax on the basis that the service provided was not an insurance service. However, the Notification No. 3/2000-ST provides exemption to all services provided in relation to general insurance business under specific government schemes, including the one in question. Therefore, the appellant was deemed eligible for the exemption and not liable to pay any service tax on the commission received. The impugned order was set aside, and the appeal was allowed.

Separate Judgment by Judges:
The judgment was pronounced in the open court on 19.06.2023 by HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) AND HON'BLE MR. C.L. MAHAR, MEMBER (TECHNICAL).

---