The Directorate General of GST Investigations (DGGI) is investigating insurance major ICICI Prudential, along with 14 other insurance companies and multiple banks and NBFCs, for fraudulently availing ineligible input tax credit without the supply of goods or services.
The DGGI has detected fraud to the tune of ₹824 crore, out of which it has recovered a total of ₹217 crore. The agency says the names of more entities are likely to be unearthed as the investigation progresses. This means the quantum of the alleged fraud may also go up.
The DGGI began its probe based on specific information against ICICI Prudential Insurance on availment of ineligible credit. "The investigations revealed that M/s ICICI Pru had availed and utilised ineligible ITC without the underlying supply of goods/services. They have voluntarily paid ₹100 cr in cash under section 74(5) of CGST Act,2017 during the investigation," the DGGI said.
The agency widened the probe by identifying common intermediaries, and further intelligence was gathered. "The officers of Mumbai Zonal Unit visited the premises of a number of corporates -- insurance companies, intermediary marketing or branding companies, NBFCs and banks, in multiple cities under search or visit mode. As a result of the same, similar cases of availment and utilisation of ineligible ITC without the receipt of underlying supply of goods or services were detected," the DGGI said.
"The investigations revealed that these entities had formed an arrangement to pass on ineligible ITC in the guise of marketing services and fraudulent invoices were raised by following a systematic modus in connivance with each other," the statement added.
"It appears that the modus was systematically planned and executed mainly at the behest of insurance companies. Statements of key persons involved indicate that the insurance companies have been executing the modus since the inception of GST," it added. The investigation into the matter is ongoing.