Service tax on insurance premium - form st 3

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Raj Prakash (Querist)
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17 April 2015 DEAR SIR/MADAM

MY FRIEND IS A DIRECTOR OF PRIVATE LTD COMPANY. ONE OF ITS BUSINESS IS TO COLLECT INSURANCE PREMIUM(VEHICLE/ GENERAL INSURANCE)ALONG WITH SERVICE TAX ON THE PREMIUM. THE COMPANY COLLECTS THE PREMIUM FROM THE INSURED AND REMIT IT TO THE COMPANY'S BANK ACCOUNT AND THEN TRANSFER THE SAME TO INSURANCE COMPANY.

FURTHER HE IS NOT GIVING ANY RECEIPT/ACKNOWLEDGEMENT TO THE INSURED FOR COLLECTING THE AMOUNT. BUT THE INSURANCE COMPANY IS GIVEN THE SAME TO THE INSURED.

IN THIS REGARD MY QUERIES ARE

1) ON SUBMITTING FORM ST-3 (SERVICE TAX) WHETHER THE WHOLE AMOUNT RECEIVED FROM THE INSURED (PREMIUM + SERVICE TAX) SHOULD BE SHOWN IN THE FORM (SL. NO. B1.1 - PAGE PAYABLE SERVICE). OR ELSE HE NEED TO SHOW ONLY THE COMMISSION THAT IS RECEIVED BY THE COMPANY FROM THE INSURANCE COMPANY?

2) WHETHER HE NEEDS TO COLLECT/REMIT ANY SERVICE TAX FROM THE INSURED/INSURANCE COMPANY FOR THE ABOVE TRANSACTION?

3) IF YES UNDER WHAT BASIS?

THANKING YOU IN ADVANCE

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 1. In form ST-3 only the commission received by the company should be shown.
2. Service tax will be paid by insurance company under reverse charge for the above transaction.

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Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Thank you Seetharaman Sir,

Whether,
1) he needs to pay service tax on commission received from the insurance company.
2) he needs to issue any receipt/ acknowledgement to the insured for collecting the premium.

Thank you in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 1) No, under reverse charge it will be paid by insurance company.
2) No, receipt is issued by insurance company.

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Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Thank You Seetharaman Sir,

Is it an abatement or exemption?
Please specify the notification no. along with serial no. in order to show the same in Form - ST 3 (Sl. No. A11.2 OR A12.2, Page Payable Service).

Thank Your

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 It is not an abatement or exemption. Since it is not a taxable service for the company don't show this service in ST-3.

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Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Dear Sir/Madam,

Please explain the difference between Abatement and Exemption in relation to Service tax?

Whether a notification issued under the Finance Act 1994 shall act as notification for both abatement and exemption?

Thank you in advance

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Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Thank you Seetharaman Sir,

Whether he needs to file nil return in this case?

Thank you

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 If abatement is 60% only tax payable on 40% and for exemption no service tax payable.
Yes nil return has to be filed.

Raj Prakash

Raj Prakash (Querist)
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17 April 2015 THANK YOU SEETHARAMAN

WHAT IS NOTIFICATION NO. THAT HAS TO BE MENTIONED IN THE ST-3 RETURN FOR THE ABOVE?

THANK YOU

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 NIL return can be filied by claiming exemption vide N/N-33/2012 dated 20-06-12 in the appropriate column and the taxable amount shall become zero.

Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Thank You Seetharaman Sir,

Suppose if he receives commission amounting to Rs.15 lakhs (more than rs. 10 lakhs) what he needs to do?

Thank you in advance.

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Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Thank you Seetharaman Sir,

Suppose if he receives commission amounting to Rs.15 lakhs (more than rs. 10 lakhs (ssi exemption limit)) what he needs to do?

Thank you in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 I modify my reply don't opt for N/N 33/2012.

You have to fill the amount in (c) (iii) of ST-3. Amount received as pure agent.

(c)
Value on which service tax is exempt/ not payable
(i) Amount received against export of service^
(ii) Amount received (Paid#) towards exempted service (other than export of service, i.e. (i) above)
(iii) Amount received as/ (Paid to#) pure agent (Please see instruction).

Raj Prakash

Raj Prakash (Querist)
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17 April 2015 Sir,

I can't able to under stand what you are trying to say in the above reply. Please give detailed reply in this regard.

Thanking you in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 You should not choose any exemption or abatement option in the form.
Choose to fill in the following part of form ST-3.
F. Value of taxable service, service tax payable and gross amount charged:

you have to choose c (iii). and fill the detail.

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