New India Assurance Company Ltd Faces Tax Demand Of 23.79 Billion Rupees Over GST On Co-Insurance Premiums

New India Assurance Company Ltd, one of India’s leading public sector general insurance companies, is currently under the scanner as it has received a significant tax order alleging a demand of 23.79 billion rupees. The tax order claims that the company failed to discharge Goods and Services Tax (GST) on co-insurance premiums over multiple financial years.

Key Highlights Of The Tax Order

The show cause notice was issued by the office of Additional Commissioner, Mumbai-South, Maharashtra, covering financial years April 2018 to March 2023.

The alleged GST demand totals approximately ₹22,980 million, including tax, interest, and penalties related to co-insurance premium collections.

The order has been issued under Sections 74 and 123 of the Central Goods and Services Tax Act for alleged non-compliance in discharging GST liability.

New India Assurance Company Ltd has categorically stated that it has a strong case on merits and is preparing a detailed reply based on advice from tax consultants.

The tax authorities have required the company to justify why this demand should not be levied through legal adjudication within the prescribed timelines.

Impact On The Company And Sector

This order represents one of the significant GST compliance challenges faced by public sector insurers and highlights the complexities of taxation related to co-insurance arrangements. Despite the pending dispute, New India Assurance continues to focus on growth, having achieved record gross written premiums and strategic plans for diversification in upcoming fiscal years.

Legal And Investor Outlook

The company’s proactive legal response aims to protect stakeholders’ interests and maintain operational stability. While such tax demands can create short-term uncertainties, investors view the insurer’s robust market position and evolving product offerings favorably.

Source: Business Standard, Economic Times, CNBC-TV18, New India Assurance Ltd Filings