The tax department has sent notices to 20 general insurance companies including HDFC Ergo and Star Health. These notices have been sent to insurance companies working in Special Economic Zones (SEZs) and a tax dues of Rs 2,000 crore has been demanded from them.
Names of these general insurance companies
According to an ET report, the 20 general insurance companies that have been sent notices for GST dues include HDFC Ergo General Insurance Company, Star Health and Allied Insurance, Cholamandalam MS General Insurance Company, New India Assurance Company and United India Insurance Company. Show cause notices have been issued to all these companies by the GST department.
Notices sent for Integrated GST
The report quoted sources related to the matter as saying that the notices sent to the insurance companies by the Directorate of GST Intelligence (DGGI) are regarding the liability of Integrated GST. Under section 16 of the Integrated GST Act, there is no tax on supplies or exports made in SEZs. However, these notices are regarding the services provided to the employees and their families of the industrial units operating in SEZs.
30 companies received notices worth Rs 5,500 crores
This is not the first case when insurance companies have come under the radar of the tax department for GST dues. Earlier, notices were sent to about 30 insurance companies for tax dues of more than Rs 5,500 crore. At that time, the tax department had accused the insurance companies of irregularities in the payment of commission to the agents, which was opposed by the insurance companies.
According to this, the department created the liability
According to the Directorate of GST Intelligence, GST liability is created at the rate of 18 percent on the services provided to the employees and their families of the units located in SEZs. Tax dues have been calculated on this basis. According to this calculation of DGGI, liabilities of about 2 thousand crore rupees are being created on the insurance companies. There has been no response from the insurance companies on this notice yet.
