15 insurance companies, multiple intermediary marketing companies, multiple NBFCs, and banks have discovered tax evasion of Rs 824 crore by the GST Intelligence, a law enforcement agency. They are accused of availing of the ITC's input tax credit without the underlying supply of goods and services.
The probe started after specific information was revealed against ICICI Prudential InsurancePrudential Insurance regarding availing of ineligible credit, the DGGI Directorate General of GST Intelligence Mumbai Zonal Unit said on Thursday.
The probe revealed that ICICI Pru had not availed of the ineligible ITC without the underlying supply of goods or services. The statement said that they had paid 100 cr in cash under section 74 5 of the CGST Act, 2017 during the investigation.
Additional intelligence was developed based on the same aspect of rewards passed on to nominees of agents who sell policies individually and was identified by certain common intermediaries.
The officers of the Mumbai Zonal Unit visited the premises of a number of insurance companies, intermediary marketing branding companies, NBFCs, and banks in multiple cities.
Similar cases of credit fraud were detected, according to the agency. The probe agency has found that these entities had formed an arrangement to pass on ineligible ITC under the guise of marketing services and fraudulent invoices were raised by following a systematic modus in connivance with each other.
The modus was systematically planned and executed at the behest of insurance companies, according to officials. The statement said key persons involved indicated that the insurance companies had been executing the modus since the inception of GST.
The GST evasion to the tune of 824 crore has been unveiled, and various insurance companies which have availed and utilised ineligible credit have paid a total amount of 217 crore in cash under sec 74 5 of the CGST Act, 2017.