Financial services firm Bajaj Finserv Ltd on Tuesday (October 3) said its subsidiary Bajaj Allianz General Insurance has received a show cause cum demand notice from the Directorate General of GST Intelligence, Pune zonal unit.
The agency issued a show cause cum demand notice on September 29, 2023, citing a tax demand of Rs 1,010 crore, according to a stock exchange filing.
Bajaj Allianz General Insurance is now the fifth insurer to receive a significant GST demand, joining a growing list of insurance companies facing tax-related challenges.
Prior to this, HDFC Life had encountered a tax demand of Rs 942 crore, followed by ICICI Pru Life with Rs 492 crore, LIC with Rs 290 crore, and ICICI Lombard with a staggering Rs 1,729 crore demand.
The allegations laid out in the notice relate to the period spanning from July 2017 to March 2022. They revolve around two primary issues: non-payment of GST on co-insurance premiums accepted as followers in the case of coinsurance transactions, and non-payment of GST on reinsurance commission received for the reinsurance premium ceded to various Indian and foreign reinsurance companies.
Bajaj Allianz General Insurance has asserted that these matters are industry-wide issues and, in consultation with its tax advisors, intends to respond appropriately to the show cause cum demand notice within the prescribed timelines.
Shares of Bajaj Finserv Ltd ended at Rs 1,560.50, up by Rs 20.05, or 1.30 percent on the BSE.
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