DGGI serves show cause notices to insurtech startups Go Digit and Policybazaar, HDFC Bank, and 120 other insurance players over tax evasion allegations

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The Directorate General of GST Intelligence (DGGI) has reportedly issued show cause notices to multiple insurance players, including insurtech startups Go Digit and Policybazaar, and HDFC Bank, among others. The notices are part of a widened probe against insurance companies for wrongful claim of input tax credit, which began in 2022, and are said to be centred on invoices raised from 2018 to March 2022, with authorities detecting evasion of INR 2,250 crore.

According to the notices, the companies allegedly issued fake invoices for many insurance companies without providing any service, which is a punishable offence under GST norms. The DGGI is yet to release an official statement on the matter, but an officer cited by ET said that the directorate general’s investigation revealed that many insurance companies availed input tax credit based on fake invoices, prompting the agency to send notices.

At least 120 insurance intermediaries and aggregators are being probed by the DGGI for alleged tax evasion, including the three companies listed above. The authorities claim that these entities formed an arrangement to pass on ineligible input tax credit under the garb of marketing services. They also alleged that these entities raised fraudulent invoices by following a systematic modus in connivance with each other. If found guilty, companies would be liable to a 100% penalty.

This development comes as tax authorities have been looking into startups across multiple industries for suspected tax evasion. Inc42 has reached out to Go Digit and Policybazaar for comment and will update the story accordingly.

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We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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DGGI serves show cause notices to insurtech startups Go Digit and Policybazaar, HDFC Bank, and 120 other insurance players over tax evasion allegations

The Directorate General of GST Intelligence (DGGI) has reportedly issued show cause notices to multiple insurance players, including insurtech startups Go Digit and Policybazaar, and HDFC Bank, among others. The notices are part of a widened probe against insurance companies for wrongful claim of input tax credit, which began in 2022, and are said to be centred on invoices raised from 2018 to March 2022, with authorities detecting evasion of INR 2,250 crore.

According to the notices, the companies allegedly issued fake invoices for many insurance companies without providing any service, which is a punishable offence under GST norms. The DGGI is yet to release an official statement on the matter, but an officer cited by ET said that the directorate general’s investigation revealed that many insurance companies availed input tax credit based on fake invoices, prompting the agency to send notices.

At least 120 insurance intermediaries and aggregators are being probed by the DGGI for alleged tax evasion, including the three companies listed above. The authorities claim that these entities formed an arrangement to pass on ineligible input tax credit under the garb of marketing services. They also alleged that these entities raised fraudulent invoices by following a systematic modus in connivance with each other. If found guilty, companies would be liable to a 100% penalty.

This development comes as tax authorities have been looking into startups across multiple industries for suspected tax evasion. Inc42 has reached out to Go Digit and Policybazaar for comment and will update the story accordingly.

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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