Liability of service tax on brokerage

[V Sithapathy Sithapathy]

We are life insurance brokers. We receive brokerage from life insurance companies and bill the service tax over and above the brokerage. What is the law. Who should pay the service tax.

AI Summary

Life Insurance Companies, Not Agents, Liable for Service Tax on Brokerage Under Section 68(2) and Rule 2(1)(d)(iii). A query was raised regarding the liability of service tax on brokerage received by life insurance brokers. Two responses clarified that under Section 68(2) of the Finance Act, 1994, and Rule 2(1)(d)(iii) of the Service Tax Rules, 1994, the life insurance company, not the insurance agent, is responsible for paying the service tax. This provision applies specifically to insurance agents, and those who are not insurance agents are not covered by this rule.