Parl panel pulls up FinMin for delay in resolving IRDA's query

A Parliamentary panel has pulled up the Finance Ministry for taking 15 months to give clarification on a query raised by the IRDA, resulting in non- collection of service tax during the period.
"The committee are distressed to note that in this modern era of fast paced development, it took the Finance Ministry, 15 long months to give clarification on a single query raised by the IRDA resulting in non-collection of service tax during the period," the Public Accounts Committee (PAC) headed by K V Thomas said in its report on Avoidable Expenditure on service tax by Insurance Regulatory and Development Authority (IRDA).

The panel noted IRDA, which has been rendering services to public and private insurance companies' agents by collecting charges, was required with effect of July 1, 2012, to collect service tax on charges collected for the services provided by it, as per provision of Finance Bill 2012.
But, IRDA instead of collecting the tax, requested the ministry in April 2012 to get the services rendered by it in the negative list.
The panel said the ministry intimated IRDA on July 30, 2013, that the services provided by the authority are liable to service tax.
It added that IRDA's decision initially to not collect service tax and subsequently to bear the liability resulted in an avoidable expenditure of Rs 22.58 crore.

The panel, however, added as per the latest information provided by IRDA, the authority has so far recovered Rs 21.60 crore as against the total of Rs 22.58 crore.