IRDAI is set to form a three-member committee to recover service tax from insurers, insurance brokers and agents. The committee will give its recommendation on the process of recovery of service tax to the government. The decision was taken at a recently held IRDAI meeting.
IRDAI said that it is difficult to recover service tax from agents. “It was explained that even though insurers, TPAs and brokers were available, there was a difficulty in recovering the amounts from individual agents numbering about 20 lakh as the amounts to be recovered were very small and the process of recovery might be very costly,” said the insurance regulator.
IRDAI said, “After due deliberations, it was, in principle, decided to recover the amounts and resolved to authorize the Chairman to constitute a three member committee under the Chairmanship of Mr. VK Gupta, Part-time member and two other officials of the Authority to examine the matter in detail and suggest modalities for deciding the process of recovery.”
Meanwhile, IRDAI will seek permission from the government to recover service tax from insurance companies, brokers and insurance agents.
Service tax on insurance agents for the period between June 2012 and December 2013 is yet to be recovered by the government.