Insurance Premium - Service Tax on Reminders??
IT has been represented by life insurance companies that in terms of the practice followed, reminder notices/letters are being issued to the policyholders 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.
Board clarifies 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.
Some bright officer must have asked the insurance companies to pay Service Tax based on these reminders!.
CBEC Circular No.166/1/2013 -ST, Dated: January 01, 2013