Reliance General Insurance received GST notifications from DGGI for $922 million

 Reliance General Insurance received GST notifications from DGGI for $922 million

Reliance General Insurance Company (RGIC), the gem in the crown of Reliance Capital Ltd, has received four show cause warnings from the Directorate General of GST Intelligence (DGGI) for GST debts totaling 922.58 crore, according to reports on October 8.

One of the four notifications, according to sources cited by news agency PTI, relates to the GST of Rs. 478.84 crore, which is applicable as tax on re-insurance commission booked via the re-insurance services ceded to different Indian and international businesses. 

According to the individuals with knowledge of the proceedings, the notice for the second-largest sum, or 359.70 crore, relates to the imposition of tax on the co-insurance premium that RGIC had recorded as a following company in the co-insurance transactions.

The article said, naming the individuals, "The third DGGI notice relates to an amount of 78.66 crore, which is linked to the case of purportedly availing input tax credit (ITC) without supporting services in relation to the expenses incurred on marketing." They allegedly noted that this relates to the time frame of July 2017 through March 2022. In response, the business allegedly made a protest payment of 10.13 crore.

According to the report, the fourth notice for 5.38 crore is in relation to the non-payment of tax on a reverse charge basis that is applicable to the import of reinsurance services from overseas reinsurers. It was mentioned that this situation relates to the exempted crop insurance program and covers the months of July 2017 and January 2018.

Because it accounts for almost 70% of Reliance Capital's overall value, RGIC is seen as the company's most important subsidiary. The National firm Law Tribunal is conducting a debt settlement procedure for the parent firm.