Circular No.166/1/2013 –ST, F.No 354/190/2012- TRU, 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)
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.
3. 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.
4. The above clarification
is issued only for life insurance sector.
5. Trade Notice/Public
Notice may be issued to the field formations accordingly.
6. Please acknowledge
the receipt of this circular. Hindi version to follow.
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