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.
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.
CEPT 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.
