Under the GST architecture, credit for taxes paid by entities in the value chain is refunded in the form of input tax credit. Sources said the Mumbai unit of DGGI has come across around 15 insurance companies, who were allegedly claiming ITC, without the supply of goods and services. Recovery of around Rs 217 crore has been reported as companies have resorted to voluntarily paying cash, which is allowed under the Central GST Act. Further investigation is under way.
The matter started with specific information against ICICI Prudential, which led to the probe. The company allegedly had availed of and utilised “ineligible ITC”.
It is learnt to have voluntarily paid Rs 100 crore. The company did not respond to a query from TOI on Thursday evening. The Central Board of Indirect Taxes and Customs has not commented on the issue so far.
The investigation then led the GST authorities to certain common intermediaries. The officers also visited insurers, banks and NBFCs, and searches were also conducted. The investigations revealed that these entities allegedly formed an arrangement to pass on ineligible ITC, which were disguised as marketing services, fraudulent invoices were also raised, sources aware of the development said. “It appears that the modus was systematically planned and executed mainly at the behest of insurance companies,” a source said.