Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit
Circular No.166/1/2013 -ST
Room No 153, North Block, New Delhi
Dated 1st January, 2013
To
Chief Commissioner of Customs and Central Excise (All);
Chief Commissioner of Central Excise & Service Tax (All);
Director General of Service Tax; Director General of Central Excise
Intelligence; Director General of Audit;
Commissioner of Customs and Central Excise (All);
Commissioner of Central Excise and Service Tax (All);
Commissioner of Service Tax (All)
Respected Madam/Sir,
Subject: - Clarification in respect of notices/ reminder letters issued for life
insurance policies - regarding.
It has been represented by life insurance companies that in terms of the
practice followed, reminder notices/letters are being issued to the policy
holders to pay renewal premiums. Such reminder notices only solicit furtherance
of service which if accepted by policy holder by payment of premium results in a
service. Clarification has been desired whether service tax needs to be paid on
the basis of such reminders.
- The matter has been examined. Under the Point of Taxation Rules 2011, the
point of taxation generally is the date of issue of invoice or receipt of
payment whichever is earlier. The invoice mentioned refers to the invoices as
issued under Rule 4A of the Service Tax Rules 1994. No tax point arises on
account of such reminders. Thus it is clarified that reminder letters/notices
for insurance policies not being invoices would not invite levy of service tax.
In case of issuance of any invoice, point of taxation shall accordingly be
determined.
- The above clarification is issued only for life insurance sector.
- Trade Notice/Public Notice may be issued to the field formations accordingly.
- Please acknowledge the receipt of this circular. Hindi version to follow.
(S.Jayaprahasam)
Technical Officer, TRU
Tel: 011-23092037
F.No 354/190/2012- TRU