The finance ministry has declined to intervene in a plea for relief made by the insurance industry, which is facing penal action from tax authorities for goods and services tax (GST) input tax credit violations. The ministry has referred the matter to the IRDAI, said people with knowledge of the matter. Officials peg the alleged tax evasion at over 2,000 crore.
The industry had approached the revenue department seeking a lenient view of the industry-wide commission practice and not to treat these violations as wilful evasion. In a letter to the department signed by 22 insurers and intermediaries, the industry also sought relief from the frequent summons and the large penalties imposed.
“We cannot interfere in the investigation and if there is an issue regarding commissions, IRDAI is the authority, so they were referred to approach it,” an official told.
