ICICI Pru, 14 insurance firms evaded Rs 824 crore input tax credit

Officials said further investigation revealed that other insurance companies and NBFCs also exploited a similar route to avail of ineligible ITC

The GST intelligence authority has unearthed tax evasion of Rs 824 crore by 15 insurance companies, officials said on Thursday. The companies, including ICICI Prudential, are alleged to have availed of input tax credit (ITC) credit without supply of goods and services. 

The Directorate General of GST Intelligence (DGGI) has initiated investigation following a tip-off against ICICI Prudential Insurance regarding availing of ineligible credit, DGGI Mumbai Zonal unit said.

Officials said further investigation revealed that other insurance companies and non-banking finance companies (NBFCs) also exploited a similar route to avail of ineligible ITC. 

GST officers of Mumbai zone are learnt to have searched the premises of several insurance companies, intermediary marketing/branding firms, NBFCs, and banks in multiple cities, during which similar cases of misutilisation of ITC were detected without receipt of supply of goods or services, officials said. 

The investigation revealed that these entities had formed an arrangement to pass on ineligible ITC in the guise of marketing services and fraudulent invoices were raised by following a systematic modus operandi in connivance with each other. 

It appears that the strategy was systematically planned and executed at the behest of insurance companies, officials said.

The authority has recorded statements of key persons involved, indicating that the insurance companies have been following such a route to evade ITC since the inception of GST, they said.

Of the total Rs 824-crore detected amount, some of the insurance companies have voluntarily paid Rs 217 crore in cash under Section 74(5) of CGST Act, 2017. This includes ICICI Prudential, which reportedly paid Rs 100 crore in cash to the DGGI after the evasion was detected during the investigation.