Service tax on Premium Allocation Charges

[Amit Kumar Aggarwal]

Dear Sir,

May you explain me the Sec 60 ( 105) (zx ) and 60 (105) (ZZZF) with an example of service tax. Is service tax applicable on allocation charges before 17/2/2010.

[CASeetharaman KC]

I think you are referring to  Section 65 (105)(zzzzf) which pertains to "Investment Management Services provided under ULIP", under which the gross amount charged for providing such services are subject to service tax and it is immaterial which it is called allocation charges or any other term. This is governed by section 67 of the Service Tax (Determination of Value) Rules, 2006.

AI Summary

Investment Management Services subject to service tax irrespective of 'allocation charges', under valuation rules for ULIP contracts. Service tax applies to amounts charged for Investment Management Services under unit-linked insurance products; the gross amount charged is taxable irrespective of whether it is called allocation charges, and valuation for tax purposes is governed by the Service Tax (Determination of Value) Rules, 2006.