The GST Intelligence, a law enforcement agency, has detected tax evasion of Rs 824 crore by 15 insurance companies, multiple intermediary marketing companies, multiple Non-Banking Financial Companies (NBFCs), and banks. They are accused of availing of input tax credit (ITC), without the underlying supply of goods and services.
The probe started after specific information against ICICI Prudential Insurance regarding availing of ineligible credit, sources in the DGGI (Directorate General of GST Intelligence) said on Thursday.
The probe revealed that ICICI Prudential had availed and utilised ineligible tax credit without the underlying supply of goods or services. They voluntarily paid Rs 100 crore in cash during the investigation.
Certain common intermediaries were also identified and based on the same aspect of rewards passed on to nominees of agents who are selling policies individually, further intelligence was developed.
The officers of the Mumbai Zonal Unit searcjed the premises of a number of insurance companies, intermediary marketing/branding companies, NBFCs, and banks in multiple cities.
As a result of the same, the sources said, similar cases of credit fraud were detected. The probe agency has also found that these entities had formed an arrangement to pass on ineligible ITC in the guise of marketing services and fraudulent invoices were raised by following a systematic modus in connivance with each other.
According to officials, the modus was systematically planned and executed mainly at the behest of insurance companies. The statements of key persons involved indicated that the insurance companies had been executing the modus since the inception of GST.
So far, the GST evasion to the tune of Rs 824 crore has been unearthed and various insurance companies who have availed and utilised ineligible credit have voluntarily paid a total amount of Rs 217 crore in cash under sec 74(5) of CGST Act, 2017.