DEAR SIR
I WOULD LIKE TO KNOW THAT WHAT IS PROCESS OF SERVICE TAX DEDUCTION FROM THE IA COMMISSION PAID BY SBI LIFE INSURANCE CO LTD. IF THERE ARE ANY LEGAL ISSUE FOR THIS DEDUCTION THAEN PLEASE TELL MAY THIS DEDUCTION BE REFUNDED BY CONCERN DEPARTMENT.
Life Insurance Companies Must Deduct 12.36% Service Tax from Agent Commissions Under Reverse Charge Mechanism An individual inquired about the process and legal implications of service tax deduction from commissions paid by a life insurance company. The responses clarified that under the reverse charge mechanism, the insurance company is responsible for deducting service tax at a rate of 12.36% from the commission and remitting it to the central government. The insurance agent receives the net amount after tax deduction. It was confirmed that the liability for service tax lies with the insurer, not the agent, and no refund is available for the service tax paid on commissions. (AI Summary)
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