75th Founding Day Lecture Meeting on “India@2030” Know More

February 2013

Service tax not collected along with insurance premium in first three instalments – Insurance policy silent about service tax – Unfair trade practice – Insurance company cannot claim it subsequently.

By Puloma Dalal, Bakul B. Mody
Chartered Accountants
Reading Time 1 mins
fiogf49gjkf0d
Facts:

Second respondent took life Insurance policy from the appellant at an annual premium of Rs. 4,810/- in 2006. Service tax was applicable to insurance premium during the extant period. However, for the initial three years, appellant did not charge service tax on the premium. In 2009, the appellant asked for service tax along with the insurance premium. The second respondent approached the first respondent, who in turn held that no separate charge of service tax could be collected by the appellant over and above the premium of Rs. 4,810/-. A writ petition filed by the appellant against the order of the first respondent was dismissed and therefore, this appeal.

Held:

Policy was issued when service tax was in force. The appellant showed by way of its conduct that service tax was included in the premium in the initial three years. If the premium did not include service tax, the insurance company could have stated it explicitly. The company offered services to public at large and was duty bound to disclose real price being charged. Non disclosure of real price would be tantamount to conduct of unfair trade practice as per Consumer Protection Act, 1986 and the appeal was dismissed.

Download PDF

You May Also Like

High Court should examine and decide the case on merits when huge stakes are involved and Puloma Dalal, Jayesh Gogri Chartered Accountants Part a: Service Tax Recent Decisions ? Indirect Taxes 45 46 56 Bombay Chartered Acountant Journal, February 2013 BCAJ INDIRECT TAXES 596 (2013) 44-B BCAJ not dispose the case on the grounds of delay in filing appeal by department.

CENVAT credit pertaining to input services for the period prior to having service tax registrationallowed.