ICICI Lombard stock plummets after company receives GST show cause notice of Rs.1728 cr

ICICI Lombard received a Show Cause Notice from the Directorate General of GST Intelligence for failing to pay tax of around Rs.1,728 cr for a period of 5 yrs

PGurus Newsdesk

September 28, 2023

ICICI Lombard received a Show Cause Notice from the Directorate General of GST Intelligence for failing to pay tax of around Rs.1,728 cr for a period of 5 yrs

DGGI issues Rs.1,728 crore GST demand notice to ICICI Lombard

ICICI Lombard General Insurance had its stock at 1.7% down after it received a warning from the Directorate General of GST Intelligence (DGGI) for failing to pay tax of around Rs.1,728 crore for a period of five years beginning in July 2017 and ending in March 2022, says Vaibhav Vidwani, Research Analyst, Bonanza Portfolio.

Additionally, Coforge also received a tax demand notice for Rs.82.9 billion for FY2019–20, he said. Coforge was down 1.4 percent in trade.

ICICI Lombard said the company has received a Show Cause Cum Demand Notice from the Directorate General of GST Intelligence, Pune Zonal Unit under Section 73(1) of the Central Goods and Services Tax Act, 2017 (“the Act”), on September 27, 2023, alleging a tax demand of Rs.1728.86 crore.

The alleged demand and the impugned show cause cum demand notice pertain to non-payment of GST on the co-insurance premium accepted as a follower in case of coinsurance transactions and non-payment of GST on re-insurance commission accepted on the reinsurance premium ceded to various Indian and Foreign reinsurance companies during the period July 2017 to March 2022, ICICI Lombard said.

The show cause cum demand notice refers to matters relating to industry-wide issues and based on the advice of its tax advisors, the company will be filing an appropriate response to the said show cause cum demand notice within the prescribed timelines, ICICI Lombard said.

Coforge said the company has received an income tax assessment order/ demand order for the financial year 2019-20 (assessment year 2020-21) with tax demand along with interest of Rs.82.93 crore.

The assessment unit has made an adjustment under transfer pricing due to variations in margins.

Considering the jurisprudence around the adjustments made and the facts of the case, the company in consultation with its tax advisors is of the view that our position will be upheld on ultimate resolution and will not have a material adverse effect on the Group’s Financial Statement, Coforge said.

[With Inputs from IANS]

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