TaxTMI 
TaxTMI 
2022 (1) TMI 318
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....pay service tax on the three charges viz agency processing fees, backdating charges and recoveries of look-in, recovered by them over and above the normal premium, under the taxable service of "Life Insurance" as defined under Section 65 (58), 65 (61) and 65 (80) read with Section 65 (105) (zx) of the Chapter V of Finance Act, 1994, in terms of Section 67(1) of the Finance Act, 1994. 30.2) I, confirm the demand of Service Tax amounting to Rs. 35,84,582/- (Rupees Thirty Five Lakhs Eighty Four Thousand Five Hundred and Eighty Two only), under the taxable service of "Life Insurance", under section 73(2) of the Finance Act, 1994. 30.3) I, order for payment of interest under Section 75 of the Act, at appropriate rates prevalent during the material period, on the delay in payment of service tax amounting Rs. 35,84,582/- (Rupees Thirty Five Lakhs Eighty Four Thousand Five Hundred and Eighty Two only) confirmed at para 30.2) above. 30.4) I, impose a penalty under Section 76 of the Finance Act, 1994, on the notice, which shall be one hundred rupees for every day during which such failure continued or at the rate of one percent (1%) of such tax, per month, which ev....
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....f agency processing charges Rs. 34,84,395/- b) Back dating charges Rs. 26,050/- (c) Look-in charges Rs. 74,137/- • The demand in respect of the same charges for the earlier period which was confirmed by the adjudicating authority vide order in original No 17/ST/SB/2011-12 dated 30-1- 2012. was considered and has been remanded back, by the CESTAT as per the order reported at 2013-TIOL-1296- CESTAT-MUM • No service has been provided by the appellants in respect of the three charges, which are sought to be included in the taxable value of the Services of Life Insurance Services defined as per Section 65 (105) (zx) provided by them. • As per the various clarifications issued by the Board from time to time and from the definition of taxable service under the category of Life insurance services, it is evident that after the amendments made in Section 65 (105) (zx), by the Finance Act, 2011, the Service Tax under this category is leviable on the risk portion and investment management part of the premium paid by the policy holder. • In the case of Shilpa Colour Labs 2007 (5) STR 423 (Tri) [maintained by Hon. Supreme Court as reported in 2....
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....x. The latter is now being brought into the tax net. Similar services rendered by way of ULJP are already subject to service tax since 2008. 2.2 When the entire premium is only for risk cover the same shall continue to be taxed even in the revised definition. However in the case of other schemes, a significant portion of the premium is used towards investment, while the rest is allocated towards various overheads and mortality. IRDA in its circular Ref: IRDA/ACT/CIRVIP/171/2010 dated November 21, 2010 has made it mandatory for the insurance companies to share this break-up with the policy holders in the case of "Variable Insurance Policies" under the heads: premium received, deductions towards mortality, commission and expenses, interest added and closing balance. Thus amounts relating to deductions for mortality, commission and expenses are not available for investment. After the enactment of the new levy, it is proposed to amend the Service Tax Rules to give the option to pay tax at the standard rate on that portion of the premium that has not been invested and is so indicated in any of the documents given to the policy holder. Where the break-up is not indicated in any ....
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....1.2012 17) The facts of the case as well as the defence contentions of the Noticee, so far as they are relevant to the Impugned Notice dated 03.10.2012 for Rs. 36,84,582/-, remain the same. I have also gone through the findings in the bald Order-In-Original No. 17/S.T./88/2011-12 dated 30.01.2012 issued by the Commissioner (TAR), Mumbai, and have found no basis, reasoning or facts which would affect into differentiation or deviation from the said findings. Nevertheless, I proceed with my findings of this issue." The order of the Commissioner (TAR) referred to by the learned adjudicating authority has been set aside by CESTAT vide order as reported at 2013-TIOL-1296-CESTAT-MUM holding as follows: "5.1 When the Service Tax levy is imposed on life insurance policy, the Hon'ble Finance Minister in his budget-speech before the Parliament had categorically stated that he is imposing Service Tax on life insurance service to the extent of risk premium. The instructions issued by the CBE&C at the time of imposition of Service Tax on life insurance service also made it clear that Service Tax is leviable on that portion of the service, which pertains to the risk eleme....
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....ing authority in our view has not examined the matter in proper perspective taking into account the instructions issued by the Board from time to time. Accordingly, we are of the considered view that the matter has to go back to the adjudicating authority for fresh consideration in the light of the observation made by us and pass a speaking order after considering all the submissions made by the appellant by giving a clear finding on each and every contention raised by the appellant." 4.7 From the analysis of the definitions of the Life Insurance Services as per Section 65 (105) (zx) and various clarifications issued by the Board it is quite evident that the charges which are towards the risk cover and managing investment for the policy holders, are part of the value of such taxable services provided by the appellant. 4.8 The argument advanced by the revenue that the scope of definition of taxable service as defined by the Section 65 (105) (zx), do not limit the provision of the taxable service under the said category to the policy holder but is applicable to the services provided by the appellant to the applicant for insurance license because of use of phrase "any person" is....
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....s payment by (c) cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and [book adjustment, and any amount credited or debited, as the case may be, to any account, whether called 'suspense account' or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise." [emphasis supplied] 15. It was argued that payment received in 'any form' and 'any amount credited or debited, as the case may be...' is to be included for the purposes of arriving at gross amount charges and is leviable to pay service tax. On that basis, it was sought to argue that the value of goods/materials supplied free is a form of payment and, therefore, should be added. We fail to understand the logic behind the aforesaid argument. A plain reading of Explanation (c) which makes the 'gross amount charges' inclusive of certain other payments would make it clear that the purpose is to include other modes of payments, in whatever form received; be it through cheque, credit card, deduction from account etc. It is in that hue, the provisions mentions that....