INSURANCE INVOICE ISSUE AND SERVICE TAX CHARGE

[SNEHAL SHAH]

Respected sir,

We are Manufacturing of Engineering products. Our Sales order break up as under:

Rs.100/- total Sales price of Contract.

Invoice Issue as per Under :

Rs.75/- Finished Goods Material ( We are Manufacturing of goods )

Rs.10/- GTA Service tax Invoice issue

for service provide ( Actual we are not transporter but we are first issue Service tax Invoice and then after as and when material despatch we provide transport facility ) .

Rs.15/-  Finished goods Insurance Invoice issue against Insurance service provide by ( GENERAL INSURANCE COMPANY ) .

Now my question is that is that we are issue Invoice for reimbursement of Insurance amount and charge service tax on that ? I have raise question on the basis of that , we are not insurance service provider how i can issue invoice ?

Please guide in this issue and how i can reimburse our Sales billing breackup amount .

Thanks and Regards,

SNEHAL SHAH

 

[Rama Krishana]

As long as you are claiming reimbursement of Insurance on Actual Basis and the same is accrued on behalf of the buyer of the goods, the same would qualify as excludible from the total value being in the nature of Activity of Pure Agent.

AI Summary

Pure agent treatment: insurance reimbursement paid on behalf of buyer can be excluded from taxable service value. If the supplier claims insurance reimbursement on an actual basis and the insurance cost is accrued on behalf of the buyer, that reimbursement qualifies as excludible from the supplier's total taxable value as an Activity of Pure Agent, and therefore need not be included in the value subject to service tax when characterised and accounted for accordingly.