one of our client is an automobile dealer it charges insurance charges, registration charges in the contract of sale.Let amount of insuracce charged be 180000 but the premium payble to the insurance company is Rs.76000 then the balance amount will be income for the automobile dealer. whether it will be chargeble to service tax or not.
Whether circular no . 699/15/2003-CX be applicable here
As per Circular No. 699/15/2003-CX (supra), "any activity of sales dealer at the pre-sale stage or at the time of sale will not come under the purview of service tax". Hence, insurance charges collected before or at the time of sale in respect of a particular sale are not subject to service tax.
You can also see this by following the given below link:
https://www.fadaweb.com/servicetax_august11.htm
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