Directorate General of GST Intelligence (DGGI) has imposed a show cause notice to the ICICI Lombard asking the tax of Rs 17,28,86,10,803 (over Rs 1,728 crore). On the date 27th of September, the show cause notice was been obtained.
The company, in its official filing, has conveyed that the show cause notice is related to the “absence of GST payment on co-insurance premiums received as followers in coinsurance transactions and the lack of GST payment on reinsurance commissions received for the reinsurance premiums relinquished to a range of Indian and foreign reinsurance firms between July 2017 and March 2022.”
The notice from the Directorate General of Goods and Services Tax Intelligence (DGGI) compelled the company to provide reasons why GST exceeding Rs 1,728 crore should not be requisitioned and retrieved as per Section 73(1) of the Central Goods and Services Tax Act, 2017, inclusive of interest in accordance with Section 50 of the Act and penalties outlined in Section 73(1) of the CGST Act, 2017.
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ICICI Lombard has indicated that it will submit a suitable response to the show cause notice within the designated timeframes, guided by advice from its advisors.
For the non-payment of Rs 273.22 crore of tax, ICICI Lombard obtained a DGGI notice in the month of August. The issue primarily pertains to widespread concern within the industry regarding the GST applicability on salvage-adjusted amounts and ineligible GST Input Tax Credits in relation to settled motor claims. The company had previously stated in a regulatory filing that it had deposited an amount of Rs 104,13,18,970 under protest, expressly disclaiming any liability in this matter.
In July, ICICI Prudential Life Insurance Company was served with a notice by the DGGI regarding the non-payment of taxes amounting to Rs 492.06 crore, spanning a five-year period from July 2017 to July 2022.
