The life insurance industry wants service tax on fund management charges to be withdrawn, as is the case with mutual funds. The Life Insurance Council—the representative body of life insurers—will shortly make a presentation to the finance ministry urging the introduction of a uniform taxation platform for the life insurance sector.

Confirming the development, Life Insurance Council secretary general SB Mathur said: ”The life insurance industry paid a total service tax of about Rs 4,000 crore last year under various heads, including fund management charges as well as agent commission. We want a uniform tax structure on all similar financial products.

For example, at present asset management companies do not pay any service tax on fund management fees but the insurance industry pays 10.3% service tax.”