Star Health and Allied Insurance Company Ltd announced on Thursday that it has received a tax demand notice for ₹170 crore, along with a penalty of ₹8.7 crore on failure to pay GST (Goods and Services Tax).
It received the demand notice from the Office of the Deputy Commissioner of the Large Taxpayers Unit in Chennai. The demand order was issued under Section 73 of the Central GST Act, 2017, on February 14, 2024, alleging a total GST of ₹170.67 crore. The GST authorities also imposed a penalty of ₹8,67,25,664 on the company.
As per the details of the stock exchange filing, the demand order pertains to non-payment of GST liability on the re-insurance commission received by Star Health and Allied Insurance Company from April 2018 to March 2019.
“Based on the advice of its tax advisors, the Company will be filing appropriate response or appeal to the said Demand order within the prescribed timelines,” said Star Health.
Star Health believes its case against the levy of the demand, interest as well as penalty to be strong, however, the outcome and the related financial implications of the case cannot be determined at present, the insurance provider informed the stock exchanges.
The company’s net profit jumped 37.6% year-on-year (YoY) to ₹289.6 crore in the third quarter that ended December 31, 2023, compared to ₹210.5 crore in the same period a year ago. Its gross written premium in Q3FY24 increased 16.4% to ₹3,605.8 crore compared to ₹3,096.7 crore in the same period preceding year. The net premium also jumped 7.1% to ₹3,151.9 crore in the December quarter as against ₹2,943.4 crore in the same period a year ago.
Star Health is part of Rekha Rakesh Jhunjhunwala's portfolio stock. She has 3.05% holding in it as of December 2023.
Shares of Star Health and Allied Insurance Company were trading 0.75% higher at ₹557.7 apiece on BSE at 12:53 pm.
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