Management of Investment - Taxable Services - As appliable on or before 30-6-2012 - Service Tax

Management of Investment ULIP Service (W.e.f. 16-5-2008 ) What is taxable - 65(105) (zzzzf) Any service provided or to be provided to a policy holder, by an insurer carrying on life insurance business, in relation to management of investment, under unit linked insurance business, commonly known as Unit Linked Insurance Plan (ULIP) scheme. Explanation. For the purposes of this sub-clause, (i) management of segregated fund of unit linked insurance business by the insurer shall be deemed to be the service provided by the insurer to the policy holder in relation to management of investment under unit linked insurance business; (ii) the gross amount charged by the insurer from the policy holder for the said service provided or to be provided shall be equal to the maximum amount fixed by the Insurance Regulatory and Development Authority established under section 3 of the Insurance Regulatory and Development Authority Act, 1999 [41of 1999.], as fund management charges for unit linked insurance plan or the actual amount charged for the said purpose by the insurer from the policy holder, whichever is higher; Who is the provider of service An insurer carrying on life insurance business Who is the receiver of service Policy Holder **************** Circulars 1. D.O. F. No.334/1/2008-TRU dated 29.2.2008 - Changes relating to service tax through Finance Bill, 2008 and notifications. 2. D.O.F. No.334/1/2010-TRU - dated - 26.02.2010 [Changes proposed in service tax law and procedure in Union Budget 2010-11 - regarding] **************** Notes: Clauses (ii) and (iii) of Explanation to section 65(105)(zzzzf) substituted vide Finance Act, 2010, before substitution these were read as, "(ii) the gross amount charged by the insurer from the policy holder for the said services provided or to be provided shall be equivalent to the difference between, (a) premium paid by the policy holder for the Unit Linked Insurance Plan policy; and (b) the sum of premium paid for or attributable to risk cover, whether for life, health or other specified purposes, and the amount segregated for actual investment. Illustration Total premium paid for the Unit Linked Insurance Plan policy = Rs.100 Risk premium = Rs. 10 Amount actually invested = Rs. 85 Gross amount charged for the service provided = Rs. 5 [100-(10+85)]; (iii) in addition to the amount referred to in clause (ii), the gross amount charged shall include any amount charged subsequently, whether or not periodically, by the insurer from the policy holder in relation to management of investment under unit linked insurance business;"