ICICI Lombard, six other insurance companies receive SCN for non-payment of GST on reinsurance premiums since 2017

The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued notice to ICICI Lombard and six other insurance companies raising demand worth Rs 3,000 crore. The notice claims that these companies have not paid GST on reinsurance premium, despite receiving commissions from co insurance companies.


The investigation is an extension of the ongoing investigation on the Input tax credit fraud by a large number of insurance companies and intermediaries, ET has learnt.



" As we were investigating the fake invoices and input tax credit case, we discovered that many companies have received commission from their co insurance companies on reinsurance premium, but did not pay tax on it," a senior official told ET.


"This is an industry wise problem, notices have been sent to six insurance companies and more will be sent in the coming week," the official said, adding that the extent of demand may go up to Rs 3,000 crore for the six companies.


While the officials refused to divulge any names ICICI Lombard General Insurance company admitted receiving show cause notice in a filling to stock exchange.


The filing said it 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”), today i.e. on September 27, 2023 alleging a tax demand of Rs 17,28,86,10,803."


The company shall take appropriate steps in due course to reply to the SCN.
ICICI Lombard General Insurance on September 28 got a notice from the Directorate General of GST Intelligence (DGGI) for not paying tax of Rs 17,28,86,10,803 (around Rs 1,730 crore) for a period of five years starting from July 2017 till March 2022. The company said in an exchange filing that it 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”), today i.e. on September 27, 2023 alleging a tax demand of Rs 17,28,86,10,803."


"The alleged demand and the impugned show cause cum demand notice (SCN) pertains to non-payment of GST on the co-insurance premium accepted as 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," the company further said.

It added that this is relating to industry wide issues and the company will take appropriate steps to reply to the SCN.