The Comptroller and Auditor General of India (CAG) has accused insurance companies of causing a whopping loss of Rs. 352.55 crore to the exchequer. CAG has attributed this loss to delay in payment of service tax on reinsurance service, non-payment of taxes on a few services and mis-calculation of service tax on ULIPs.
In its audit report, CAG said, “Scrutiny of assessee records in seven commissionerates revealed certain compliance-related as well other issues having financial implication of Rs.352.33 crore.”
However, the government has accepted the audit observations of Rs.80.87 crore of which the government has recovered Rs.12.71 crore, said the report.
The report has accused life insurance companies like Max Life, Aviva Life, Canara HSBC Oriental Bank of Commerce, DLF Pramerica Life and ICICI Prudential of non-compliance with the norms related to service tax payment. These companies have jointly caused a loss of Rs.131 crore to the exchequer on just mis-calculation of service tax on ULIPs.