Reliance Normal Insurance coverage Firm (RGIC), a subsidiary of Reliance Capital Ltd, has obtained a number of present trigger notices from the Directorate Normal of GST Intelligence, amounting to Rs 922.58 crore.
In line with sources, the corporate has obtained 4 notices from the DGGI demanding GST of Rs 478.84 crore, Rs 359.70 crore, Rs 78.66 crore, and Rs 5.38 crore respectively, on the income generated from the companies like re-insurance and co-insurance.
In line with a tax knowledgeable, the RGIC auditors must present for this quantity in its quarterly outcomes ending September 30, as a contingent legal responsibility.
RGIC is the crown jewel of Reliance Capital which is present process a debt decision course of by NCLT. RGIC constitutes virtually 70 per cent of the whole worth of Reliance Capital.
RGIC obtained a present trigger discover from the DGGI on September 28, amounting to Rs 478.84 crore within the matter of applicability of GST on re-insurance fee booked on the re-insurance companies ceded to numerous Indian and Overseas Reinsurance corporations, the sources stated.
The GST Authority’s competition is that re-insurance fee varieties a part of the income recorded by the corporate in its books of accounts and thus it must pay GST on the identical.
Equally, one other present trigger discover, amounting to Rs 359.70 crore, was obtained by the corporate on September 28, within the matter of applicability of GST on the co-insurance premium obtained as a follower within the co-insurance transactions, they stated.
The corporate’s competition is that the lead insurer has already discharged its GST legal responsibility on your entire premium, due to this fact, there isn’t a want for the corporate to pay GST on the realisation of Follower Premium.
However, the GST division is of the opinion that there isn’t a provision within the GST Act the place one registered particular person can accumulate and disburse tax on behalf of one other, no matter any co-insurance association.
Within the co-insurance transaction, the insured has an choice to unfold their danger amongst multiple insurer by allocating danger share to a number of insurers. The corporate bearing the biggest share of danger cowl is termed because the lead insurer, whereas the opposite insurers sharing the danger are known as to the collaborating co-insurers or followers.
Within the third present trigger discover, amounting to Rs 78.66 crore, the DGGI had initiated an investigation into the matter of availing enter tax credit score (ITC) with out underlying companies with regard to advertising and marketing bills, through the interval July 1, 2017 to March 31, 2022, sources stated.
On this matter the corporate has deposited, beneath protest, the ITC quantity of Rs 10.13 crore.
The fourth present trigger discover obtained by the corporate from the DGGI is within the matter of non cost of GST beneath reverse cost foundation on the import of reinsurance companies from overseas reinsurers in respect of exempted crop insurance coverage scheme, through the interval July 2017 to January 2018.
The GST Authority has issued a tax discover of Rs 5.38 crore on this matter, they added.