The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) overturned the service tax demand on insurance commissions received by the commission agent.
The petitioner, M/s. Anindita Dutta, a proprietorship concern acting as a commission agent, was issued a Show Cause Notice for not filing the service tax of Rs. 11,56,266 on receipts of Rs. 78,13,174 reflected in its Income Tax Returns and Form 26AS for FY 2015–16 to June 2017.
The Department proposed interest and penalties by invoking an extended period of limitation. Since the appellant did not respond to the notice or attend the personal hearing, the adjudicating authority upheld the demand, including interest and penalties, in an Order-in-Original.
The petitioner before the Commissioner (Appeals) claimed that the receipts represented commission from M/s. ICICI Lombard for procuring insurance policies and that the Service Tax liability was on the insurance company under the reverse charge mechanism.
The petitioner said that the demand could not be grounded only on the ITRs and Form 26AS without establishing the type of services. The claims have been rejected by the Commissioner (Appeals), and it upheld the Order-in-Original by Order-in-Appeal dated 11.06.2024, resulting in the present appeal.
The petitioner’s counsel said that the demand was not sustainable as it was confirmed without findings for the entire period- the receipts represented commission from M/s. ICICI Lombard, on which Service Tax was liable to be paid by the insurer under the reverse charge mechanism
It stated that the nature of the receipts was supported by documentary proof and that the demand was grounded on ITRs and Form 26AS without independent verification of taxability, etc. It was therefore requested that the contested order be overturned.
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Revenue’s authorised representative repeated the findings of the lower authorities. It was furnished that the appellant was unable to establish its claim by producing adequate documentary proof before the adjudicating authority.
The Tribunal of K. Anpazhakan, Member (Technical), observed that A plain reading of the provision indicates that when an insurance company pays a commission to its insurance agent, the responsibility for paying the Service Tax falls on the insurance company under the reverse charge mechanism. In this case, since it has been established that the appellant was acting solely as a commission agent for M/s. ICICI Lombard, the insurance company, the obligation to pay the Service Tax should not have been imposed on the appellant.
| Case Title | M/s. Anindita Dutta vs Commissioner of C.G.S.T. and Central Excise |
| Case No. | W.P.(C) 5757/2025 & CM APPL. 26284/2025 |
| For Petitioner | Shri S.P. Siddhanta |
| For Respondent | Shri S.K. Dikshit |
| Kolkata CESTAT | Read Order |
