Mumbai, February 3, 2025 – SBI Life Insurance Company Ltd. (NSE: SBILIFE, BSE: 540719) has received a Goods and Services Tax (GST) demand order from the Additional Commissioner, Mumbai-East, CBIC, Maharashtra. The order, issued under Section 74 of the CGST Act, 2017, pertains to GST liabilities on Rider Premiums.
Regulatory Action & Financial Impact
The company was served the notice on February 2, 2025, regarding the demand of GST on the entire Rider Premium, instead of the base product, under Rule 32(4) of the CGST Rules. The order includes the following financial impact:| Component | Amount (₹) |
|---|---|
| Tax Demand | 19,84,20,122 |
| Interest | 0 |
| Penalty | 19,84,20,122 |
| Total Liability | 39,68,40,244 |
Company’s Response & Next Steps
SBI Life Insurance has confirmed its intention to appeal the order before the Competent Authority/Appellate Tribunal. The company will challenge the demand as per the provisions of the Goods and Services Tax Act.This regulatory development comes at a crucial time, as insurers continue to face scrutiny over GST classifications on various product components. Investors and stakeholders will be closely monitoring the appeal process and its potential impact on SBI Life’s financials.
Market & Strategic Outlook
While the immediate impact of this tax liability could put some pressure on financials, SBI Life remains a leading player in the Indian insurance sector, known for its robust financial performance and growth in premium collections. However, any unfavorable appellate decision could set a precedent for similar GST demands across the insurance industry.The company has not yet disclosed any provisioning for the liability in its financial statements. Further updates are expected following the appeal process.
Conclusion
SBI Life’s decision to contest the order aligns with industry-wide challenges on GST applicability. Investors will look for clarity on whether similar GST demands could arise for other insurers and how this regulatory stance evolves in the future.For further updates, market participants will await the company’s financial disclosures and regulatory proceedings in the coming months.