NEW DELHI: The Director General of GST Intelligence (DGGI) has detected Rs 824-crore worth of input tax credit being illegally availed by 15 life and non-life insurance companies. The Mumbai zonal unit of DGGI started investigation based on specific information against ICICI Prudential Life Insurance wrongly claiming ITC.
During the investigation, it found that 15 insurance companies with the help of intermediaries and NBFCs were fraudulently availing input tax credit by furnishing fake invoices of marketing services. According to sources, investigation by the GST intelligence revealed that these insurance companies had formed an arrangement with the intermediaries ‘to pass on ineligible ITC in the guise of marketing services and raising fake invoices’.
The DGGI sources also said that these companies have been using this modus operandi to avail ineligible ITC since the GST came into force in 2017. “It appears that the modus was systematically planned and executed mainly at the behest of insurance companies,” said sources.
So far, the DGGI has detected Rs 824 crore of fraudulent ITC claims. Some of the insurance companies, which availed and utilised the ineligible ITC have voluntarily paid a total amount of Rs 217 crore (including Rs 100 crore by ICICI Prudential Life Insurance).
Officials from the ministry of finance have confirmed that the GST department has indeed unearthed the fraudulent ITC racket, but it has not issued any formal statement on the matter yet. It is said that both life and non-life insurance companies are involved in the scam.