Huge Service Tax Evasion by Life Insurance Companies?
DGCEI, Hqrs has started investigation against major life insurance companies which indicates huge evasion of service tax by these companies. It is learnt that several teams of officers of DGCEI, Hqrs are camping at Mumbai and Bangalore and digging the financial records of these companies. It has been revealed that these companies have made massive payouts to their corporate agents but not reflected the same in their records. The record of corporate agents who received these payments booked these receipts as commission received, on which service tax is payable by the insurance companies under reverse charge. It is also learnt that Birla Sun Life Insurance has since paid around Rs 13 crores on this account. It is also learnt that officers are also investigating the recovery of service tax made by these companies from their agents which is contrary to service tax provisions. The likely evasion in the matter is computed to several hundred crores.