ICICI Lombard shares drop 3% on receiving Rs 1,729 crore tax notice

Shares of ICICI Lombard General Insurance Company Ltd  (ICICI Lombard) dropped 3 per cent in Thursday’s trade after the general insurer in a BSE filing said it received a show cause cum demand notice from the Directorate General of GST Intelligence, Pune Zonal unit, alleging a tax demand of Rs 17,28,86,10,803 (Rs 1,728.86 crore). The order was received on Thursday at 5.20 pm and the BSE filing came in at 11 pm.

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

Following the development, the scrip fell 2.82 per cent to hit a low of Rs 1,266 on BSE. With this, the stock has taken its losing streak to the seventh straight trading session. The stock has fallen 8.14 per cent in the 7-day decline.

ICICI Lombard said the notice suggested non-payment of GST on the coinsurance premium received as follower in case of co-insurance transactions. The notice also suggested non-payment of GST on reinsurance commission deducted from the reinsurance premium, ceded to various Indian and foreign reinsurers.

"The alleged demand and the impugned Show Cause Cum Demand Notice 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," ICICI Lombard said.

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