This work became expensive! Notice to companies like HDFC Bank and Policy Bazaar, tax evasion of thousands of crores

Notice For Insurance Companies: The Director General of GST Intelligence (DGGI) has widened the scope of its investigation against insurance companies for fraudulent claims of input tax credit. A report says that show cause notices have been sent to many insurance companies including HDFC Bank, Go Digit Insurance, Policy Bazaar.

In the notices sent by DGGI from its Mumbai, Ghaziabad and Bengaluru offices, it has been alleged that these companies issued fake invoices to several insurance companies without providing any service, which is a punishable offense under the GST law. The authorities have issued summons and notices to several middlemen in the last 15 days. The ET report states that 120 insurance companies are under the scanner.

Benefit taken on the basis of fake invoice

The investigation revealed that insurance companies have availed input tax credit without supplying goods and services on the basis of these fake invoices, said an official in the ET report. HDFC, Policy Bazaar and Go Digit are yet to respond to this.

what does the rule say

Rule 16 of the CGST Act, 2017 states that a buyer must have an invoice on which GST has been paid and the goods or services must be available to such buyer to avail input tax credit. Officials claim that arrangements were made to pass ineligible input tax credit in the garb of marketing and bogus invoices were made in collusion with each other. Companies will have to pay 100 percent fine in such a situation.

2,250 crore tax evasion case

During the investigation conducted during 2022, tax evasion of Rs 2,250 crore has come to the fore. During this investigation, show cause notices have also been sent to the insurance companies. It has been said in the report that tax recovery of Rs 700 crore has also been done so far. DGGI summons has already been issued to 12 insurance companies. At the same time, three investigations are in the last step. Apart from this, investigation is also going on by the Income Tax Department.

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