Nishikant Khajuria
JAMMU, July 11: In contravention of the High Court order and IRDA (Insurance Regulatory and Development Authority) directive, the Postal Department is charging 10.5 percent Service Tax on the Postal Life Insurance premium thus fleecing the State Government employees, who are forced to pay more of their hard earned money.
Ironically, the Service Tax is being charged only from the Government employees in Jammu region whereas the policy subscribers in Kashmir have been exempted from such tax for the reasons best known to the Postal Department.
The Excelsior is in possession of receipts of the policy premium, which make it clear that 10.5 percent Service Tax is being charged from only Jammu employees by the Postal Department, which is discrimination with the subscribers from this region.
It may be recalled that the State Government in exercise of the powers conferred by Section 4 and 5 of Jammu Kashmir General Sales Tax Act 1962, imposed a uniform 10.5 percent Service Tax on the Insurance policies with effect from 2007, which was implemented by the Department of Post in November 2013.
The new tax regime affected around two lakh policy holders of Postal Life Insurance (PLI) in the State where only the employees of Central and State Government Departments, nationalized banks, officers and staff of the Defence services are eligible for subscribing the same.
However, the imposition of 10.5 percent Service Tax on the Postal Life Insurances was in contravention of the IRDA directive, according to which the Service Tax is charged only on the Risk Premium, which is 10 percent of gross premium, which means only 1.5 percent tax on total premium amount.
Taking this plea, some policy holders approached the High Court, which provided an interim relief to the petitioners and ordered a stay on charging of Service Tax.
However, despite getting the court direction in this regard, the Department of Post kept on charging the Service Tax from the policy holders of Jammu while the Kashmir office of J&K Circle stopped charging any tax from the policy holders in Valley.
Alleged fleecing of Jammu employees has triggered a strong resentment among the policy holders of this region who also approached the Postal Department authorities in this regard but all in vein.
When contacted, the Chief Postmaster General, J&K Circle, Chandera Prakash said that charging of Service Tax on PLI and RPLI was the decision of State Government and he was not aware of the fact that the same was being charged only in Jammu and not in Kashmir.
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