Public sector general insurer New India Assurance has received the largest-ever Goods and Services Tax (GST) demand notice among all insurers, amounting to ₹2,379 crore.
The notice is based on Section 73(1) of the Central Goods and Services Tax (CGST) Act, 2017 (which deals with general non-payment or short payment) and is received from the Directorate General of GST Intelligence, Pune Zonal Unit, the company said in an exchange filing.
New India Assurance clarified that the demand is associated with industry-wide issues pertaining to the non-payment of GST on co-insurance premiums accepted as followers in co-insurance transactions, where 100% GST was paid by the leading insurer on behalf of the follower. Additionally, it relates to the non-payment of GST on reinsurance commissions accepted on reinsurance premiums ceded to various Indian and foreign reinsurance companies during the period from July 2017 to March 2022.
"Based on the advice of our tax consultants, we will be filing an appropriate response to the said show cause cum demand notice within the prescribed timelines," it said.
This development underscores a broader trend in the insurance sector, with GST demand notices totalling nearly ₹5,832 crore from insurers, highlighting increased scrutiny by tax authorities.
Prior to this, Bajaj Allianz General Insurance received a show cause cum demand notice from the Directorate General of GST Intelligence, Pune zonal unit, amounting to Rs 1,010 crore.
HDFC Life also 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 Rs 1,729 crore demand.
At the time of writing this report, New India Assurance was trading 0.60 percent lower at Rs 135.40 apiece on the BSE.
(Edited by : Amrita)
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