Rule 6 of Service Tax Rules Amended
IN Rule 6 of the Service Tax Rules, 1994, for the existing sub-rule (7A), the following sub-rule shall be substituted, namely,-
“(7A) An insurer carrying on life insurance business shall have the option to pay tax:
(i) on the gross premium charged from a policy holder reduced by the amount allocated for investment, or savings on behalf of policy holder, if such amount is intimated to the policy holder at the time of providing of service;
(ii) 1.5 per cent of the gross amount of premium charged from a policy holder in all other cases;
towards the discharge of his service tax liability instead of paying service tax at the rate specified in section 66 of Chapter V of the said Act:
Provided that such option shall not be available in cases where the entire premium paid by the policy holder is only towards risk cover in life insurance.”
This amendment will come into force from May 1, 2011 in the wake of amendment to section 65(105)(zx) of Finance Act, 2004.
Notification No. , Dated: April 25, 2011