service tax on SBI LIFE INSURANCE BROKERS

[satbir singhwahi]

ACTING AS BROKERS FOR SBI LIFE INSURANCE BUSINESS, WHETHER LIABLE TO SERVICE TAX ON COMMISSION EARNED .

[Guest]

Liability to pay service tax will be on Insurer not on commission agent as per Rule 2 (1) (d) (i) (A) of Service Tax Rules, 1994

AI Summary

Service tax liability falls on insurer for insurance brokerage commissions, not on commission agents under applicable service tax rules. Service tax liability for brokerage commissions in life insurance transactions is attributed to the insurer rather than to individual commission agents; receipts for arranging or procuring insurance business are treated as services to the insurer, making the insurer the taxable person responsible to discharge service tax on commissions paid to brokers under the applicable service tax rules.