Applicability of service tax

This query is : Resolved

CA Chandresh Agrawal (Querist)
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08 January 2011 One of my client is DSA (Direct Selling Agent) of an insurance company. He is also appointing sub-agents under him.

As insurance company is liable to pay service tax on insurance auxiliary services, insurance company is shifting 50% burden of service tax on DSA i.e. making commision payment after deduction TDS and Service Tax.

In turn DSA is also passing on some commision to sub-agents appointed by him.
So my question is

1. Whether Insurance compnay is right in deducting service tax ?
2. Is he liable to pay service tax on commision paid by him to sub agents for using their services to procure business ?
3. Can he take credit of Service tax deducted by insurance company ?

Kindly help me to find answer of above questions.

Thank You

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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09 January 2011 shifting of tax burgen depends on mutual consent or terms of agreements. It is not covered under tax law.

CA Chandresh Agrawal

CA Chandresh Agrawal (Querist)
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10 January 2011 Thanks for answer....

Can you help me to decide applicability of service tax for receiving services of sub agent for procuring insurance business.

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