Irda will charge service tax on providing services to industry players

Insurance regulator Insurance and Regulatory Development Authority (Irda) will charge service tax from industry players on providing services such registration and renewal.

The regulator is required to collect service tax from its insurance companies, brokers and agents, said an Irda notification.

TPAs, insurance repositories, web aggregators, referral entities and surveyors too will have to pay tax for availing services like grant of registration, licences, renewals and so on, the Irda aid.

[caption id="attachment_948829" align="alignleft" width="380"] David Hilowitz/Flickr[/caption]

Service receivers are required to add service tax component, as applicable, to the fee while making remittances to the authority from January 1, it added.

The proposals were approved by Irda at its meeting held on Wednesday. However, it did not disclose the rate of service tax applicable to individual categories.

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At present, the rate of Service Tax is 12 per cent.

Life insurance policyholders pay service tax at the rate of 3 per cent for the first year premium.

For subsequent years it is 1.5 per cent. At the same time, availing of the full cenvat credit is allowed.

PTI