Probe on insurers over, Income Tax department finds alleged tax evasion of Rs 15,000 cr

economictimes.indiatimes.com:

insurance companies and uncovered evasion of more than ₹15,000 crore, said people with knowledge of the matter. The tax on this will be about ₹4,500 crore, they said. The probe, which covered more than 25 insurers and over 250 businesses used to route commissions to agents, was conducted by the department's investigation wing.

The findings have been passed on to assessing officers (AOs), said the people cited. «The findings, which detail the alleged evasion, the modus operandi and the amounts involved, have been shared with assessing officers of the concerned firms and the mid-level entities,» said one of them. «The AOs, after studying the findings, will raise the tax demand, inclusive of interest and penalty.» Apart from the IT department, the insurers were also investigated by the Directorate General of GST Intelligence (DGGI).

While the DGGI was probing them for fake input tax credit (ITC) claims, the tax department was investigating alleged tax evasion in violation of Insurance Regulatory and Development Authority of India (IRDAI) norms. Since March, the DGGI has sent show-cause notices to 30 firms seeking GST payments of over Rs 4,000 crore. Sources added that these firms have paid around Rs 700 crore so far to the GST authorities and are in the process of approaching the adjudicating authority against the DGGI's action.

A senior government official told ET that industry executives plan to meet the finance ministry representatives to «resolve the issue». The industry is of the view that the actions by the DGGI and the I-T department are unjust and the commission issue is a matter of legal interpretation, the person said. «The departments have made out the case before the ministry that it's a case of fraud and these