Hi All. Would anyone please advise if you have experience with this case? The scenario was a house had twice cases bursting or overflowing of pipes. The house owner would like to claim insurance for it. The house owner also got the same contractor for making repairs.

The first time, insurance company had seen the condition. House owner and contractor proceeded with the repairs. House owner claimed insurance.

The second time, insurance company had seen the condition. House owner would like to proceed with the repairs. However, the contractor said, he would forgo the first time repair government tax charges. He has to charge 25% of government tax for this time since the house owner wants to claim insurance. The 25% is to pay to government.

Questions raised,

1. Why only charge government tax when the house owner wants to claim insurance?
2. Is there a government tax to charge to customer / end user for this plumbing or repair service sector (not sure which sector or proper title it falls to)?
3. Why is there a 25% government tax? Are not we using SST 6% and it has increased to 8% recently? Is it or not a scam?

Thank you!