Insurance companies are liable to pay Rs. 20,000 crore for GST violation: DGGI
The Directorate General of GST Intelligence (DGGI), the central anti-evasion arm under the GST framework, has found insurance companies in violation of GST rules. In an exit interview with CNBC-TV18, Anil Kumar Gupta, Principal DG of DGGI, revealed that these companies have not been paying GST on services provided to employees in Special Economic Zone (SEZ) units.
Recently, the DGGI issued notices to around 20 general insurance companies operating in SEZs, alleging unpaid dues amounting to Rs. 20,000 crore for services provided to employees of industrial units within these zones and their families.
Gupta clarified that these services are not exempt from GST, making the insurance companies liable to pay the outstanding amounts.
Some of the companies that have received show-cause notices from the DGGI include HDFC Ergo General Insurance Co., Star Health & Allied Insurance, Cholamandalam MS General Insurance Co., New India Assurance Co., and United India Insurance Co. The notices refer to Integrated GST (IGST) issues, with the DGGI accusing these companies of misusing provisions that exempt certain SEZ services under Section 16 of the IGST Act.
