Govt's tax evasion summons to insurance firms
The finance ministry has issued summons to about a dozen insurance firms seeking documents pertaining to sale of insurance policies and commission paid to their field associates as part of its probe into alleged service tax evasion of over Rs 300 crore by them.india Updated: Oct 07, 2012 11:09 IST
The finance ministry has issued summons to about a dozen insurance firms seeking documents pertaining to sale of insurance policies and commission paid to their field associates as part of its probe into alleged service tax evasion of over Rs 300 crore by them.
Official sources said that firms including Birla Sun Life Insurance, ICICI Prudential, HDFC Life Insurance, MetLife Insurance and Reliance Life Insurance Company among others have been issued summons by Directorate General of Central Excise Intelligence (DGCEI), an intelligence arm under the finance ministry.
An email query seeking response from HDFC Life Insurance, MetLife Insurance, Birla Sun Life and ICICI Prudential was not answered. However, a Reliance Life Insurance Company (RLIC) spokesperson confirmed receiving a letter from the department seeking information.
"We have received a letter from the DGCEI seeking some information. We understand that this is part of a process wherein the department has sought similar information from several other insurance companies.
"RLIC is in full compliance with applicable laws and regulations and will be providing the required information as desired," the spokesperson said.
Preliminary probe so far has found alleged irregularities including evasion of service tax by misrepresenting the information on accounts book and fudging records related to commission paid to field associates, agents and brokers who were selling the insurance policies, the sources said.
The notices were sent under Section 14 of the Central Excise Act 1944 to the companies, they said.
The Act empowers a central excise officer to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry being undertaken by the officer.
"One of the companies was paying more commission to their brokers and field associates but avoiding payment of service tax on the amount. There were discrepancies in records of payment given to such brokers maintained by it," a source said.
First Published: Oct 07, 2012 10:57 IST