The Directorate General of GST Intelligence (DGGI) has initiated motion in opposition to a number of insurance coverage corporations, together with HDFC Bank, Go Digit Insurance, and Policybazaar, for allegedly issuing pretend invoices to assert enter tax credit score with out offering any companies. DGGI officers have despatched show-cause notices and summons to at the very least 120 insurance coverage intermediaries and aggregators throughout the nation within the final 15 days, after a year-long investigation revealed evasion of Rs 2,250 crore via fraudulent invoices raised from 2018 to March 2022, in line with experiences.
According to an official from DGGI, the investigation has uncovered that insurance coverage corporations obtained enter tax credit score with out receiving precise items or companies, counting on fraudulent invoices supplied by insurance coverage intermediaries. Notices have been despatched in response to this discovering. As per the GST legislation, a purchaser will need to have an bill on which GST has been paid, and will need to have obtained the products or companies to avail enter tax credit score, as per Rule 16 of the CGST Act, 2017.
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Furthermore, officers disclosed that these entities had devised schemes to switch ineligible enter tax credit score by disguising them as advertising and marketing companies, and that they had generated fraudulent invoices as a method to evade taxes. In a separate case, tax authorities have additionally despatched notices and summons to insurance coverage corporations, and in some circumstances, restoration of tax has been made. According to officers, a complete of Rs 700 crore has been collected as pre-deposit from these corporations, and summons have been issued to 12 insurance coverage corporations by DGGI.
Previously, the DGGI had issued notices to roughly 10-12 mutual fund homes, requesting data concerning their previous transactions. In February, the DGGI accused these mutual funds of improperly claiming enter tax credit score so as to scale back their GST legal responsibility, by recording particular bills in 2017-18 in a method that didn’t align with the accounting practices mandated for bills capped at 2.25 % of belongings below administration (AUM) by Asset Management Companies.
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