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 Insurance Regulatory and Development Authority of India (Irdai), said people with knowledge of the matter. Officials peg the alleged tax evasion at over ₹2,000 crore.
The insurance industry had approached the revenue department in the first week of April 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 summonses and the large penalties imposed.
