The
PLI Directorate of India Post has decided to collect the Service Tax on insurance
premium from all PLI and RPLI policy holders w.e.f. 01/01/2015. The circular in which recovery of service tax
from individual policy holders was stopped from 1/11/2007 and was decided to
meet the liability on Service Tax from the PLI/RPLI fund.
Later the case was re-examined in the light of ever increasing out-go from the PLI Fund I RPLI Fund, IRDA guidelines issued to indicate separately the amount of premium and service tax collected from individual policy holder and also collection of service tax by LIC and other insurance companies from their policy holders.
Later the case was re-examined in the light of ever increasing out-go from the PLI Fund I RPLI Fund, IRDA guidelines issued to indicate separately the amount of premium and service tax collected from individual policy holder and also collection of service tax by LIC and other insurance companies from their policy holders.
The Service Tax @ 3.09% (Including education and higher education cess) of the gross premium during the first year and @ 1.545% (Including education and higher education cess) on subsequent years i.e., second year onwards (rounded off to nearest rupee) is to be collected from the Policy Holders separately and a consolidated receipt issued for the total amount i.e. premium+ service tax.
The
service tax is to be collected every time the premium is collected, be it
monthly, quarterly, half yearly or annually at the rates cited above. Insurant who pay the premium in the form of
cheque (s) should be advised to include the service tax component also at the
above prescribed rate in the value of the cheque.
It
should collect the above mentioned service tax and show the same separately in
the receipts issued to the PLI/RPLI policy holders. At the end of the day, the PO records should
indicate, the premium collected and service tax collected separately in all their accounts and consolidated accordingly. In all the returns to Postal Accounts Offices
and DPLI Kolkata pertaining to PLI and RPLI these two components should be correctly
reflected to facilitate amount collected and amount depicted in departmental accounts
and further book adjustment with the Service Tax Department.
PTC
Mysore is also being advised to make necessary changes in the Meghdoot software
and NIC Delhi in the respective module of its software.
All
Drawing and Disbursing Offices who deduct the premium from the salary of their
employees should also add the Sales Tax component and recover the same every month
and indicate in all their records. DAP
Offices and DPLI Kolkata will reflect the collections under respective heads.
View Original Order
View Original Order
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