Some insurers gave fake bills when quizzed on ITC: Probe

economictimes.indiatimes.com:

GST) evasion by up to 30 insurers has found that in certain cases, the companies submitted hurriedly made invoices to contest charges of wrongful input tax credit claims by the authorities, sources in the know told ET. «In the case of a major insurance firm summoned during the course of the probe, the executives tried to submit fake e-way bills raised by its vendors to claim the input tax credit,» said an official privy to the development. «When confronted with the audit findings, the company agreed to pay at least half the GST demand.» GST E-way bill is a document used to tracking goods in transit, and datasets are triangulated with costing entries in the enterprise software systems to establish the authenticity of input credit claims.

«This (presenting fake e-way bills) is just one of the many methods used by these companies to pay overriding commissions (ORCs) to agents and claim ITC. However, when there was no service rendered in the first place, no ITC can be claimed,» added the official. According to sources, 30 companies under the government scanner have paid around ₹700 crore so far in GST, while the government's demand under this taxation head is estimated to be up to ₹5,000 crore.

"HDFC Life has paid ₹210 crore, ICICI Prudential ₹190 crore, while Bajaj Allianz, Tata AIA, and Aditya Birla Sun Life have paid between ₹20 and ₹50 crore each," the source cited above said. Spokespersons at the respective insurers declined to comment. HDFC Life and ICICI Prudential Life Insurance previously told exchanges that they received GST demand notices of ₹942.18 crore and ₹492.06 crore, respectively.