ICICI Prudential Life gets Demand Notice for alleged GST Liability of 492 crore

A central agency tasked with preventing GST revenue loss has completed its investigation into at least six of the 30 insurance firms it is investigating over alleged malpractices regarding commission payments to their agents, and is in the process of sending them show-cause notices (SCNs), according to official sources familiar with the ongoing investigation.

ICICI Prudential Life Insurance has received comparable notices for an alleged GST liabilities of roughly Rs.492 crore, according to these sources.

Section 74 of the CGST Act empowers the Directorate General of GST Intelligence (DGGI) to issue a notice following the completion of an investigation in situations where an input tax credit (ITC) has been improperly claimed. Multiple DGGI divisions, including teams in Mumbai and Meerut, are examining these insurance companies for alleged malpractices and potential GST evasion totaling more than Rs.5,500 crore.

ICICI Prudential informed stock markets that it has got a show-cause-cum-demand notice from DGGI in the amount of Rs.492 crore from July 2017 to July 2022.

The corporation stated that it will react to the notice and challenge the case in due time. The insurance stated that it had deposited Rs.190 crore without taking any obligation in this regard.

The GST authority issued a show-cause-cum-demand notice to HDFC Life Insurance Co last week for liabilities of Rs.942.18 crore from July 2017 to March 31, 2022.

“After HDFC Life, ICICI Pru has the highest liability, and it is being investigated for claiming ITC without actually providing services,” an official familiar with the situation said.

The role of PolicyBazaar was also investigated in regard of the ICICI Prudential case.

Meanwhile, HDFC Life notified the stock exchanges that the ITC matter is an industry-wide issue that would be addressed with “appropriate steps” in due course. While the corporation will defend the case, it has made a Rs.250 crore deposit with DGGI.