Insurance News

gst: GST Evasion Notice: DGGI seeks Rs 3k crore from ICICI Lombard and other insurance cos


The Directorate General of Goods and Services Tax Intelligence (DGGI) has sent notices seeking nearly Rs 3,000 crore in tax from several insurance companies including ICICI Lombard. The notices claim that these companies had not paid GST on reinsurance premiums despite receiving commissions from co-insurance companies.

“Many companies have received commission from their co-insurance companies on reinsurance premium, but did not pay tax (GST) on it,” a senior official told ET.

The official said he is aware of six notices but refused to divulge any names citing an ongoing investigation.

“Notices have been sent to six insurance companies and more will be sent in the coming week,” the official said, adding that the total tax demand may go up to Rs 3,000 crore.

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The amount may go even higher after including penalty and interest, the official added.

Meanwhile, ICICI Lombard informed the stock exchanges on Thursday that it received a Rs 1,729 crore tax demand.

“The alleged demand and the impugned show cause cum demand notice pertains to non-payment of GST on the co-insurance premium accepted as follower in case of coinsurance transactions and non-payment of GST on reinsurance commission accepted on the reinsurance premium ceded to various Indian and foreign reinsurance companies during the period July 2017 to March 2022,” the company said.

The company shall take appropriate steps in due course to reply to the show cause notice, it added.

Last week, Life Insurance Corporation said it received a Rs 290 crore tax notice, including penalty and interest, for not reversing input tax credit on premiums received from customers.

“Some companies had not reversed input tax credit on premium received so notices are being sent by the department,” Central Board of Indirect Taxes and Customs chairman Sanjay Kumar Agarwal told ET Thursday on the sidelines of an event, without taking any names adding that he has not seen the notice.

The DGGI is already probing many insurance companies and intermediaries, accusing them of making input tax credit claims through fake invoices and alleging other tax discrepancies. Till July 31, the authorities had detected about Rs 3,500 crore input tax credit discrepancies.

DGGI’s offices in Mumbai, Bengaluru and Ghaziabad had begun the investigations alleging that the insurance companies claimed input tax credit by getting fake invoices from intermediaries and agents without receiving any services.


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