Bajaj Allianz, ICICI Prudential face IT probe for evading taxes since 2017

Bajaj Allianz Life Insurance and ICICI Prudential Life Insurance have been issued show-cause notices for evading taxes since 2017, as part of an Income Tax Department probe spanning 16 insurers for evading about ₹5,000 crore ($610 million) in unpaid dues, news agency Reuters reported.

The Directorate General of Goods and Services Tax Intelligence (DGGI) officials have estimated that the insurance companies under probe owe about ₹5,000 crore in unpaid taxes, interest and penalties since July 2017, when the government implemented the Goods and Services Tax (GST), the report said.

The report said some other insurance companies may also get the show-cause notices for evading the taxes since July 2017 as DGGI officials are in process of widening the probe to other insurance companies as well.

The report further said the case would become meritless if the Insurance Regulatory and Development Authority of India (IRDAI)–backdates a new rule around commissions as the industry is already asking the regulator to make the change retrospectively.

The insurance regulator has, effective April 1, removed separate limits for commissions and has imposed an overall ceiling on operating expenses and commissions. 

To establish the practices being followed by insurance companies, the tax officials have also questioned some banks that, as corporate agents, sell insurance policies to their customers.