Service tax on re-insurance commission - regarding

Reinsurance expense sharing not a business auxiliary service; no separate service tax where both insurers pay tax on premiums.

The circular clarifies that amounts retained by an insurer from premiums paid by a reinsurer constitute joint administrative expense sharing and not consideration for the insurer providing Business Auxiliary Service to the reinsurer; since both insurer and reinsurer are liable to service tax on their respective premiums under the Finance Act, taxation of the retained amounts as another taxable service is not warranted, and pending cases should be decided accordingly.