India’s tax authority has sent Bajaj Allianz Life Insurance and ICICI Prudential Life Insurance show-cause notices for evading taxes since 2017, as part of a probe spanning 16 insurers and about $610 million in unpaid dues, three sources said.
The probe, started in September last year, is a crackdown on the insurance industry’s practice of accounting for all sales commissions above the regulator-prescribed limit as advertising and marketing costs, and then claiming tax credit, two of the sources said.
Tax authorities estimate that 16 insurance companies in all owe the government about 50 billion rupees ($610 million) in unpaid taxes, interest and penalties since July 2017, when India implemented goods and services tax (GST), two sources said.
India’s Directorate General of Goods and Services Tax Intelligence (DGGI) is in the process of sending show-cause notices to other insurance companies as well, said two sources, including a government official.
