Insurance comanpies get ₹2,000 crore GST notices
services tax authorities have sent notices to more than 20 general insurance companies with operations in special economic zones (SEZs), demanding about ₹2,000 crore in unpaid GST over services provided to employees of industrial units at SEZs and their families.
HDFC Ergo General Insurance Co, Star Health & Allied Insurance, Cholamandalam MS General Insurance Co, New India Assurance Co and United India Insurance Co are among the companies that received show-cause notices (SCNs) over Integrated GST from the Directorate of GST Intelligence (DGGI), people in the know said.
No tax is levied on exports and supplies to SEZs under Section 16 of the Integrated GST (IGST) Act.
DGGI investigation
While this covers insurance services provided to SEZ units, an investigation by the DGGI found that the insurers misused the provision by extending it to group medical insurance cover provided to the employees of SEZ units, people in the know told ET.
«The probe found that the services which were billed to SEZ units were also being extended to the employees and their families of the SEZ units. IGST hasn't been paid on these services hence they have been sent SCNs,» said an official privy to the development.
This is the second instance when the insurance sector is coming under the scanner of the DGGI that probes GST evasion. It had earlier sent notices to around 30 insurance firms over alleged malpractices regarding commission payments to their agents. The companies have contested the notices, which claimed GST evasion of over
