ICICI Prudential Life Insurance on Wednesday said it has refuted the contention of the GST department with regard to tax liability due to input tax credit (ITC) claims.
In a filing to stock exchanges, ICICI Prudential Life said it had last fiscal received an intimation from the Directorate General of GST Intelligence (DGGI) of estimated tax liability to the company.
“The company has filed a response refuting the claim,” it said.
ICICI Prudential also clarified that it has not received any ‘show cause notice with regard to the tax liability from DGGI’ for evasion of taxes and/or unpaid dues and hence has not made any provision or contingent liability for the same in the financial statements for the year ended March 31, 2023.
In the last fiscal, the Directorate General of GST Intelligence (DGGI) initiated a GST enquiry into certain expenses for which input GST credit had been claimed by the company.
“The ongoing enquiries of DGGI is part of an investigation on an insurance industry-wide practice and is not specific to the practices of the Company, as such,” ICICI Prudential said.
In the absence of receipt of a formal show cause notice detailing the grounds and rationale on which the tax demand is proposed to be raised on the company, the company evaluated the possibility of a tax obligation, which as of now appears to be remote, it added.
In September last year, the Mumbai unit of the DGGI had said that an ITC of Rs 824 crore had been availed by 16 insurance companies on the basis of fake invoices. Out of this, insurers had voluntarily paid Rs 217 crore after the DGGI investigation.
DGGI investigations revealed that these insurers were actually paying commissions beyond IRDAI’s permissible limit to their corporate agents in the garb of expenses related to marketing and brand activation.