The Goods and Services Tax wing of the Central Board of Indirect Taxes and Customs (CBIC) performs investigations with respect to various insurance companies. There are different life and non-life insurers to whom the tax authorities have taken out the search operations.
From the source, it has been revealed that the tax investigations were the cases in which the insurance firms would have asked for a higher ITC than what they would have qualified for. The same would not be the first time, CBIC would launch a collaborative action towards multiple companies in the sector.
In the former times, the indirect tax department would have searched out the non-life companies for alleged tax evasion in the motor insurance business. The combined dues would secure the amount of Rs 1500 cr.
During the same duration, the quantum of the overdrawn input tax credit (ITC) under GST is yet to be added, however, the same is anticipated to be over Rs 3000 cr for the whole industry. “The combined demand by the department from the insurance arms of one of the financial sector entities is itself close to Rs 600 crore, it is understood.”
No company has commented on the government’s action that they had taken for the investigation.
A top source in the Insurance Regulatory and Development Authority of India demonstrated the scope of action via the CBIC.
But the source specified that the regulator would not be told officially via the finance ministry. Multiple companies would be in favour of the action opted via roping in the General Insurance Council and the Life Insurance Council to provide the collaborative response to the GST wing of CBIC.
Read also: GST Impact on Insurance Sector with Slab Rates
In the former 2 years, the government would be taking measures to ensure that there would be no GST revenue leakage. Both the direct and indirect tax departments would choose to collect their data to ensure the tax due would get provided.
The gross GST revenue in the month of August 2022 obtained attained Rs 1.43 trillion a 28% higher year on year. For the former 6 months in a row, the monthly GST revenues would have crossed Rs 1.4 trillion mark.
