Star Health and Allied Insurance Co. Ltd, a private insurance company, has received 25 tax demand orders from Goods & Services Tax (GST) and Central Excise authorities across six states, totaling Rs 49 crores. The tax demands are related to alleged violations, including non-payment of GST on coinsurance transactions, non-disclosure of transactions in statutory returns, and failure to issue invoices for coinsurance services.
The tax demands were issued by the authorities in Haryana, Delhi, Maharashtra, Tamil Nadu, Telangana, and Karnataka. The Maharashtra office received the highest number of tax demand orders, totaling Rs 19.4 crores, followed by Tamil Nadu’s office, which received five orders worth Rs 16.2 crores.
The alleged violations relate to the company’s coinsurance transactions, which involve the insurance company acting as a “follower” in an insurance triangle, where one insurance company insures another insurance company’s risk. The tax authorities have alleged that Star Health failed to pay GST on these transactions, did not disclose them in their statutory returns, and did not issue invoices for the services provided.
In response, Star Health has stated that it will challenge the tax demands by filing an appeal and a writ petition with the appropriate authorities, based on legal counsel’s advice. This news highlights the importance of tax compliance for businesses and the potential consequences for non-compliance.