Reliance General Insurance gets Rs 922-cr show cause notice by GST authority
Reliance General Insurance Company (RGIC), a unit of Reliance Capital Ltd, on Sunday received received multiple show cause notices, amounting to Rs 922.58 crore, from the Directorate General of GST Intelligence, reported PTI.
The notices relate to the applicability of GST on re-insurance commission and co-insurance premium, as well as availing input tax credit and non-payment of GST on the import of reinsurance services.
According to PTI sources, the company has received four notices from the DGGI demanding GST of Rs 478.84 crore, Rs 359.70 crore, Rs 78.66 crore, and Rs 5.38 crore respectively.
The RGIC auditors will have to provide for this amount in its quarterly results ending September 30, as a contingent liability, PTI cited a tax expert as saying.
RGIC is the crown jewel of Reliance Capital which is undergoing a debt resolution process through NCLT. RGIC constitutes almost 70 per cent of the total value of Reliance Capital.
RGIC received a show cause notice from the DGGI on September 28, amounting to Rs 478.84 crore in the matter of applicability of GST on re-insurance commission booked on the re-insurance services ceded to various Indian and Foreign Reinsurance companies, the sources said.
The GST Authority's contention is that re-insurance commission forms part of the revenue recorded by the company in its books of accounts and thus it needs to pay GST on the same.
Similarly, another show cause notice, amounting to Rs 359.70 crore, was received by the company on September 28, in the matter of applicability of GST on the co-insurance premium received as a follower in the co-insurance transactions, they said.
The company's contention is that the lead insurer has already discharged its GST liability on the
