Insurance companies may soon face goods and services tax (GST) audits as tax authorities plan a “deep dive” into their business practices to check for the possibility of a raft of tax-linked irregularities.
Several insurance companies are being probed for wrongly availing of the input tax credit without the underlying supply of goods and services based on fake invoices generated by their channel partners and intermediaries.
“We want to deep dive into the overall business and see if there are further taxation issues besides commissions, which are already being investigated,” a senior official of the Central Board of Indirect Taxes and Customs (CBIC) told.
GST audits are typically conducted to verify declared sales, taxes paid, refunds claimed, and input tax credits availed of by looking at tax returns and other records maintained by businesses. Any mismatch in information across documents could raise a red flag.
