Shares of Icici Lombard General Insurance dropped by about 2 percent after the insurer declared that it got a GST demand notice from GST investigation agency DGGI. In a regulatory filing on Wednesday, ICICI Lombard stated that it received a show cause Cum Demand Notice from the Directorate General of GST Intelligence (DGGI), Pune Zonal Unit on September 27, claiming a tax demand of Rs 1,728 crore. 

“The alleged demand and the impugned Show Cause Cum Demand Notice concerns non-payment of GST on the Co-insurance premium accepted as follower in case of co-insurance 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 company stated that the Show Cause Cum Demand Notice pertains to matters relating to industry-wide issues and based on the advice of its tax advisors, the company will be submitting an appropriate response to the said Show Cause Cum Demand Notice within the prescribed timelines.

Shares of the General Insurance company commenced trading 2 percent lower on Thursday. By the closing bell, ICICI Lombard General Insurance shares settled at approximately Rs 1280.35, 1.72 percent lower compared to the previous closing price.

Also Read: Housing Sales In Q3 Reach Record High; Increase by 36 Percent In Top 7 Cities, According to Report

According to reports, this is the second instance the company has received such a notice. ICICI Lombard received a notice for a tax liability of Rs 273.44 crore under Section 74(1) of the Central Goods and Services Tax Act. Another ICICI Bank subsidiary, ICICI Prudential Life received a notice from DGGI for failing to pay tax of Rs 492.06 crore for a period of five years starting from July 2017. 

The Economic Times reported in July that the Directorate General of GST Intelligence (DGGI) is investigating 30 insurance companies for alleged GST evasion. At the time it had completed the investigation into 15 of them and detected input tax credit discrepancies amounting to Rs 3,500 crore so far. The agency was in the process of sending notices to the remaining 15 companies and expects to complete the probe by November.

In June 2023, HDFC Life Insurance also received a show cause notice from DGGI demanding Rs 942 crore tax for the July 2017 to FY22 period.