"Massive GST Notices: Reliance General Insurance Faces ₹922.58 Crore Tax Challenge"

The Directorate General of GST Intelligence (DGGI) has issued four show cause notices to Reliance General Insurance Company (RGIC) in respect of Goods and Services Tax (GST) liabilities totaling ₹922.58 crore. This incident was reported on 8 October. One of these notices pertains to GST dues of ₹478.84 crore, which specifically relate to taxation of reinsurance commission linked to services provided to various Indian and foreign entities. News agency PTI has given this information quoting sources.

The second largest notice, amounting to ₹359.70 crore, focuses on the applicability of tax on co-insurance premium within co-insurance transactions where the RGIC acts as a follower entity.

The third notice, totaling ₹78.66 crore, pertains to alleged utilization of input tax credit (ITC) without underlying services in respect of marketing expenses incurred between July 2017 and March 2022. Reportedly, in response to this notice, the company paid ₹10.13 crore under protest.

The fourth notice, amounting to ₹5.38 crore, pertains to non-payment of tax on reverse charge basis for reinsurance services imported from foreign reinsurers. The issue relates to the subsidized crop insurance scheme and covers the period from July 2017 to January 2018.

It is important to note that RGIC is a significant subsidiary of Reliance Capital, accounting for about 70 per cent of its total value. Currently, the parent company is undergoing debt resolution process under the National Company Law Tribunal.