ICICI Lombard, HDFC Ergo get tax notices

After a CAG report for FY12-13 had pointed out that many insurance companies have flouted some tax rules. The service tax department which had conducted investigations over the past few weeks, has issued tax notices to around seven-eight general insurance companies on possible case of tax evasion.

Companies that are under are ICICI Lombard, HDFC Ergo and GIC Re, with sources indicating that ICICI Lombard and HDFC Ergo have got tax notice.

The service tax department is alleging that companies have taken certain additional credit or input credit on certain transactions. One of them being with respect to third party motor pool. The overall tax demand that can be raised in this crackdown is expected to be more than Rs 300-500 crore.

While HDFC Ergo has confirmed to CNBC-TV18 saying that they have received notice with respect to disallowing certain credits on service tax. They also said that HDFC Ergo will be examining the details and will respond to department soon. ICICI Lombard did not respond while GIC RE denied receiving any such notice.