Registration of service provider incase of r c mechanism
This query is : Resolved
07 May 2014
Dear Expert- Insurance agent receives commission from insurance company and service tax is also paid by insurance company as per reverse charge mechanism (100% to be paid by SR)
Q1)Now commission received has crossed Rs 10 Lakhs, Is insurance agent require to get himself registered under service tax? even though he is not require to pay service tax since it is paid by insurace company.
Q2) if yes then under which category of service, insurance agent should get himself registered? (Q2 not very impt)
Q3) if yes then while filling ST 1 in point no 4. Category of Registrant what is to be tick ? under
(a) Person liable to pay service tax i) service provider or service receiver?
Or (b) Other person/class of persons?
as per section 69(1) every person liable to pay service tax and section 69(2) the notified person by CG i.e service receiver should get register under service tax.
incase if 100% ST is to be paid by service receiver then even service provider should get himself registered?
Q1)Now commission received has crossed Rs 10 Lakhs, Is insurance agent require to get himself registered under service tax? even though he is not require to pay service tax since it is paid by insurace company.
Q2) if yes then under which category of service, insurance agent should get himself registered? (Q2 not very impt)
Q3) if yes then while filling ST 1 in point no 4. Category of Registrant what is to be tick ? under
(a) Person liable to pay service tax i) service provider or service receiver?
Or (b) Other person/class of persons?
as per section 69(1) every person liable to pay service tax and section 69(2) the notified person by CG i.e service receiver should get register under service tax.
incase if 100% ST is to be paid by service receiver then even service provider should get himself registered?
07 May 2014
as per notification no 30/2012-st
you are not liable s tax under RCM you are only service provider so not required s tax registration.
can u got insurance commission under section 194D so not problem to u
you are not liable s tax under RCM you are only service provider so not required s tax registration.
can u got insurance commission under section 194D so not problem to u
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08 May 2014
m confused. can i get more reply from experts.pls reply
20 July 2025
This is a great question and was a common area of confusion under the old Service Tax regime, especially in Reverse Charge Mechanism (RCM) cases like insurance agents.
Let’s break it down and answer each part clearly:
✅ Background
Under the pre-GST Service Tax regime, as per Notification No. 30/2012-ST, for certain services (like insurance agent), the entire tax liability (100%) was on the service recipient — in this case, the insurance company, under Reverse Charge Mechanism (RCM).
🔍 Your Questions Answered:
Q1: Is the Insurance Agent required to register under Service Tax once their commission exceeds ₹10 lakhs, even if the tax is paid by the insurance company?
✅ Answer: No, the insurance agent is not required to register under Service Tax even if turnover exceeds ₹10 lakh, if:
The entire service tax is payable by the service recipient (insurance company) under RCM, and
The agent does not provide any other taxable service under forward charge.
🔸 Supporting Explanation:
As per Section 69(1) of the Finance Act, 1994, only those "liable to pay service tax" are required to register.
In RCM cases like this, the service provider (insurance agent) is NOT liable to pay tax, so registration is not mandatory, even if the threshold is crossed.
CBEC’s Education Guide 2012 and several clarifications confirmed this.
📌 So, if the insurance agent is providing only such services (fully under RCM), he need NOT register under service tax.
Q2: If yes (which it’s not), what category of service should the insurance agent register under?
✅ If registration were hypothetically needed (e.g., if agent starts providing other taxable services), the category would be:
"Insurance Auxiliary Services provided by Insurance Agents"
Q3: In ST-1, under Category of Registrant, what should be selected?
✅ If one had to register (in case some tax liability arose), you'd select:
(a) Person liable to pay service tax → Service Provider, if you're under forward charge.
But in this RCM case, since you're not liable, you wouldn't be registering at all.
✅ Conclusion Summary:
Question Answer
Q1. Is registration required after ₹10 lakh commission? ❌ No, if 100% tax is paid by insurance company under RCM
Q2. Under which category to register? ✅ Insurance Auxiliary Services (only if needed)
Q3. What to tick in ST-1 Form? ❌ Not applicable in pure RCM case
📝 Practical Tip:
Unless the insurance agent starts providing other taxable services or the law changes the RCM liability, no service tax registration is required.
Let’s break it down and answer each part clearly:
✅ Background
Under the pre-GST Service Tax regime, as per Notification No. 30/2012-ST, for certain services (like insurance agent), the entire tax liability (100%) was on the service recipient — in this case, the insurance company, under Reverse Charge Mechanism (RCM).
🔍 Your Questions Answered:
Q1: Is the Insurance Agent required to register under Service Tax once their commission exceeds ₹10 lakhs, even if the tax is paid by the insurance company?
✅ Answer: No, the insurance agent is not required to register under Service Tax even if turnover exceeds ₹10 lakh, if:
The entire service tax is payable by the service recipient (insurance company) under RCM, and
The agent does not provide any other taxable service under forward charge.
🔸 Supporting Explanation:
As per Section 69(1) of the Finance Act, 1994, only those "liable to pay service tax" are required to register.
In RCM cases like this, the service provider (insurance agent) is NOT liable to pay tax, so registration is not mandatory, even if the threshold is crossed.
CBEC’s Education Guide 2012 and several clarifications confirmed this.
📌 So, if the insurance agent is providing only such services (fully under RCM), he need NOT register under service tax.
Q2: If yes (which it’s not), what category of service should the insurance agent register under?
✅ If registration were hypothetically needed (e.g., if agent starts providing other taxable services), the category would be:
"Insurance Auxiliary Services provided by Insurance Agents"
Q3: In ST-1, under Category of Registrant, what should be selected?
✅ If one had to register (in case some tax liability arose), you'd select:
(a) Person liable to pay service tax → Service Provider, if you're under forward charge.
But in this RCM case, since you're not liable, you wouldn't be registering at all.
✅ Conclusion Summary:
Question Answer
Q1. Is registration required after ₹10 lakh commission? ❌ No, if 100% tax is paid by insurance company under RCM
Q2. Under which category to register? ✅ Insurance Auxiliary Services (only if needed)
Q3. What to tick in ST-1 Form? ❌ Not applicable in pure RCM case
📝 Practical Tip:
Unless the insurance agent starts providing other taxable services or the law changes the RCM liability, no service tax registration is required.
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