Mumbai, February 3, 2025
ICICI Lombard General Insurance Company Limited (BSE: 540716, NSE: ICICIGI) has received an order from the Additional Commissioner of CGST & Central Excise, Palghar Commissionerate, imposing a tax demand of ₹1,191.42 crore under Section 74 of the Central Goods and Services Tax (GST) Act, 2017. The order also includes a penalty of ₹1,191.58 crore, bringing the total liability to approximately ₹2,383 crore, along with interest under Section 50 of the Act.Key Highlights of the Order:
| Parameter | Details |
|---|---|
| Authority Issuing Order | Additional Commissioner of CGST & Central Excise, Palghar Commissionerate |
| Period Covered | July 2017 – March 2023 |
| Reason for Demand | Disallowance of Input Tax Credit (ITC) on certain marketing expenses and short payment of GST under reverse charge on specific expenses |
| Financial Impact | ₹1,191.42 crore tax demand, ₹1,191.58 crore penalty, plus interest |
| Company’s Response | Plans to appeal the order and explore legal options |
| Advance Deposit | ₹50 crore deposited under protest in previous financial statements |
Background of the Case
The order, received on February 3, 2025, at 1:43 PM, relates to an industry-wide dispute on Input Tax Credit (ITC) claims for marketing expenses. It also includes a short payment of GST under the reverse charge mechanism.ICICI Lombard’s Stand
The company has categorically denied liability and stated that it will challenge the ruling before the Appellate Authorities or pursue other legal options. The tax demand and penalty will be evaluated for disclosure as contingent liabilities in its financial statements. Additionally, the company had previously deposited ₹50 crore under protest, which the order now seeks to appropriate.Market Implications
- The tax liability, if upheld, could impact ICICI Lombard’s profitability.
- The ruling has industry-wide implications, potentially affecting other insurance firms claiming ITC on marketing expenses.
- Investors will closely monitor the company’s appeal process and potential relief from higher authorities.
Conclusion
ICICI Lombard faces a major tax dispute but is actively contesting the order. The resolution of this matter could influence regulatory interpretations for the entire insurance industry. Investors should closely follow legal proceedings and updates regarding ITC claims.For further details, the official filing is available on ICICI Lombard’s website.