ICICI Lombard Faces ₹62.37 Crore GST Demand from CGST & Central Excise Authority

Mumbai, January 30, 2025 – ICICI Lombard General Insurance Company Limited has received a Goods and Services Tax (GST) demand order amounting to ₹31.18 crore from the Additional Commissioner of CGST & Central Excise, Palghar Commissionerate. The order, issued under Section 74 of the Central Goods and Services Tax Act, 2017, also levies an equivalent penalty of ₹31.18 crore, effectively imposing a total financial impact of ₹62.37 crore on the company.

Regulatory Action and Alleged Violation​

The demand pertains to the period between July 2017 and March 2024, citing non-payment of Integrated Goods and Services Tax (IGST) on Group Health Insurance and Group Personal Accident policies provided to units located within Special Economic Zones (SEZs). The order also includes interest under Section 50 of the Act.

Company’s Response​

ICICI Lombard has stated that it will pursue an appeal before the appropriate Appellate Authorities and explore other legal remedies, including the option of filing a writ petition. The company emphasized that the matter is part of a broader industry-wide dispute concerning the applicability of GST on insurance services extended to SEZ units.

Financial and Operational Impact​

• GST Demand: ₹31,18,41,716
• Penalty: ₹31,18,41,716
• Interest: Applicable under Section 50 of the Act

While the demand is significant, the company's financial position and ability to absorb the impact remain undisclosed at this stage.

Conclusion​

This development highlights ongoing regulatory scrutiny in the insurance sector, particularly concerning tax treatment for services rendered to SEZ entities. Investors and stakeholders will closely watch ICICI Lombard’s next steps, including its legal approach to challenging the order.