IT department will conduct GST audit of 15 insurance companies

AHMEDABAD: Almost all the top insurance companies in the country may soon have to go through the Goods and Services Tax audit. Tax authorities want to probe deeper into the business practices of insurance companies. Along with this, it will be checked whether the companies are committing tax fraud or not.

The Directorate General of GST Intelligence is probing 15 insurance companies and their intermediaries for raising bogus bills and illegally claiming input tax credit. So far the statements of all insurance companies and concerned intermediaries have been recorded and preparations are underway to issue show cause notices to them.

Many companies are accused of taking input tax credit by showing fake bills. These companies used their middlemen and other mechanisms to create fake bills without actually supplying the goods and services. Tax officials are probing the companies involved in the alleged scam.

A senior official of the Central Board of Indirect Taxes and Customs said, 'We are looking into the entire business model and system of insurance companies and want to see if there is any tax evasion other than commission. Investigations into cases of commission under insurance are already underway.

An audit is necessary to understand business practices and check the possibility of tax irregularities.' GST audit is ongoing to verify sales figures, tax paid, refund claims and input tax credit. For this, tax officials are looking at tax returns and other records. CBIC Chairman Vivek Johri said in an interview a few days ago that more than 50,000 cases were shortlisted for audit in the current financial year.