Applicability of service tax
This query is : Resolved
CA Chandresh Agrawal
(Querist)
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
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
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
(Querist)
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.
Can you help me to decide applicability of service tax for receiving services of sub agent for procuring insurance business.
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