GST Watchdog Tightens Noose Around HDFC Bank, Go Digit Insurance, Policy Bazaar In Rs 2,250 Cr Tax Evasion Case

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GST Watchdog Tightens Noose Around HDFC Bank, Go Digit Insurance, Policy Bazaar In Rs 2,250 Cr Tax Evasion Case

As per Rule 16 of CGST Ac7, 2017, a buyer must have an invoice on which GST has been paid, and such a buyer must have received the goods or services, for availing of the input tax credit.

Rs 2250 Crore Tax Evasion Case: Directorate General of GST Intelligence Issues Summons To Insurance Companies Including HDFC Bank, Go Digit Insurance, PolicyBazaar | reports

New Delhi: Widening its probe against insurance companies for wrongful claim of input tax credit, the Directorate General of GST Intelligence (DGGI has served show cause notices to multiple insurance intermediaries including HDFC Bank, Go Digit Insurance, PolicyBazaar, Economic Times reported quoting people familiar with the development .

It said that the notices sent by the Mumbai, Ghaziabad, and Bengaluru offices of DGGI alleged that these companies issued fake invoices for many insurance companies without providing any service, which is a punishable offense with prosecution under the GST law.

The DGGI officials have sent out summons and notices to these intermediaries in the last 15 days and at least 120 insurance intermediaries and aggregators from across the country are under scrutiny, the report said.

“Our investigation has revealed that the insurance companies availed input tax credit (ITC) without the underlying supply of goods and services, based on fake invoices provided by these insurance intermediaries. We have sent notices”, told an official quoted in the ET report.

As per Rule 16 of CGST Ac7, 2017, a buyer must have an invoice on which GST has been paid, and such a buyer must have received the goods or services, for availing of the input tax credit.

As per the report, officials claim these entities had formed an arrangement to pass on ineligible Input Tax Credit in the guise of marketing services and fraudulent invoices were raised by following a systematic modus in connivance with each other.

Companies will be liable to a 100% penalty, the official mentioned in the report said. So far, authorities have detected tax evasion to the tune of Rs 2,250 crore and it is centered on invoices raised from 2018 to March 2022, the report added.

The sources mentioned in the report also said that tax authorities have sent notices and summons to insurance companies separately and made recovery of tax in some cases. An official said so far Rs 700 crore had been collected as pre-deposit from these companies.

Already 12 insurance companies have been issued summons by DGGI, as per the report. It added that three investigations were in the final stage and the report would be finalized soon.

Apart from the DGGI, the income tax department is also conducting a separate probe in the matter, the report said. The IT department is learned to be examining tax returns of the insurance companies to investigate wrongful claim expenses towards payment of commission to these intermediaries, it added.

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Published Date: April 14, 2023 at 12:33 PM IST



Updated Date: April 14, 2023 12:37 PM IST



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