• Notification Date: 09-08-2023
• Notification No: N/A

ICICI Lombard falls on Rs 273-cr GST Liability, DGGI issued Show-cause Notice

ICICI Lombard General Insurance share price fell over a percent on August 9, a day after the company received a Show Cause Notice (SCN) from the Directorate General of GST Intelligence. 

The notice dated July 26 asserts a tax liability of Rs 273.44 crore under Section 74(1) of the Central Goods and Services Tax Act, accompanied by interest charges and a penalty. 

The issue primarily concerns a widespread matter regarding the imposition of GST on salvage-adjusted and disqualified Input Tax Credit associated with settled motor claims. 

At 10 am, the stock was quoting at Rs 1,404.70 on the NSE, down 0.8 percent from previous close. 

ICICI Lombard has placed a sum of Rs 104.13 crore in a deposit under protest, without admitting any responsibility in connection with this matter. The disclosure of this deposited amount has been made, said the company. 

Earlier on June 26, another one of ICICI's insurance companies, ICICI Prudential Life, had received a notice from the Directorate General of GST Intelligence (DGGI) for not paying tax of Rs. 492.60 crore for over five years from July 2017 till July 2022. 

For the quarter ended June 2023, ICICI Lombard General Insurance reported a net profit of Rs 390.4 crore, a jump of 12 percent on-year. Gross premium climbed 19.7 percent YoY to Rs 6,622.1 crore against Rs 5,530 crore in Q1 FY23. 

The insurer's combined ratio in the quarter improved to 103.8 percent for the June quarter as against 104.1 percent a year ago. 

The combined ratio is the sum of incurred losses and operating expenses measured as a percentage of earned premium. Lower combined ratio means the company is doing better financially. 

On August 7, ICICI Bank received approval from the RBI to increase its shareholding in ICICI Lombard General Insurance Company, in multiple tranches up to 4 percent. 

The private lender currently holds 48.01 percent share in ICICI Lombard.