Tax representative image.
Credit: Getty Image
By Shruti Srivastava and Advait Palepu
Indian authorities sent a $208 million tax demand to a private insurer, the latest in a growing list of firms slapped with similar notices as the government intensifies its crackdown on alleged evasion.
ICICI Lombard General Insurance Co Ltd. received the notice for alleged non-payment of goods and services tax, it said in a stock exchange filing late Wednesday. Similar orders have been issued to several others, including major gaming companies, totaling more than Rs 500 billion ($6 billion).
The flurry of demands may potentially dent India’s attempts to lure investment away from China and improve the entrenched perception that the South Asian country — which has a history of hounding foreign firms over retrospective and arbitrary tax charges — is a difficult place to do business.
Earlier this week, Delta Corp. was slapped a tax demand, leading to a sharp decline in its shares. Media reported that Tiger Global-backed Dream11 was also served with a notice, as was the Life Insurance Corp. of India the week before. The companies plan to appeal.
The notices sent to online gaming companies are part of the legal process, Sanjay Kumar Agarwal, chairman of the central board of indirect taxes and customs, told reporters in New Delhi on Thursday.
The allegations and demands also threaten to provoke sprawling litigation, further harming India’s $20 billion online gaming industry, which is already battling the government’s decision to impose a goods and service tax of 28 per cent on the sector from next month.
Since the government decided to move ahead with the goods and services levy on online gaming and casinos, over 100 affected firms have sought changes, asking for the tax to be levied on platform fees charged by companies to users to avoid impacting volumes.
In September last year, tax authorities sought 210 billion rupees from Bengaluru-based gaming company Gameskraft Technologies Pvt. The order quashed by an Indian court and an appeal is now pending with the Supreme Court.