Tax Liability Notice Affects Share Price and Financial Performance
This notice cites a tax liability of Rs 273.44 crore under Section 74(1) of the Central Goods and Services Tax Act. The notice also includes interest charges and a penalty.
Tax Liability Notice Affects Share Price and Financial Performance
Following the receipt of a Show Cause Notice (SCN) from the Directorate General of GST Intelligence on July 26, ICICI Lombard General Insurance experienced a share price decline of over 1% on August 9.
This notice cites a tax liability of Rs 273.44 crore under Section 74(1) of the Central Goods and Services Tax Act. The notice also includes interest charges and a penalty.
The primary concern revolves around the imposition of GST on adjusted salvage and disqualified Input Tax Credits linked to resolved motor claims.
At 10 am, the stock was trading at Rs 1,404.70 on the NSE, marking a 0.8 percent decrease from the previous close.
ICICI Lombard has put Rs 104.13 crore in a deposit under protest, with no acknowledgment of responsibility in connection with this matter. The company has disclosed the deposited amount.
Earlier on June 26, another insurance company under ICICI, ICICI Prudential Life, had received a notice from the Directorate General of GST Intelligence (DGGI). This notice was related to the non-payment of a tax amounting to Rs. 492.06 crore over a five-year period, from July 2017 to July 2022.
For the quarter ending in June 2023, ICICI Lombard General Insurance reported a net profit of Rs 390.4 crore, marking a 12 percent increase from the previous year. Gross premium also saw a significant rise of 19.7 percent YoY, reaching Rs 6,622.1 crore compared to Rs 5,530 crore in Q1 FY23.
In the June quarter, the insurer's combined ratio improved to 103.8 percent from 104.1 percent a year ago. This ratio shows the company's expenses and losses compared to earned premiums. A lower ratio indicates better financial performance.
On August 7, ICICI Bank got RBI approval to raise its stake in ICICI Lombard General Insurance Company by up to 4 percent in multiple steps. Currently, the private bank owns 48.01 percent of ICICI Lombard's shares.
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Krishna Gopal Varshney
An editor at MyitronlinenewsKrishna Gopal Varshney, Founder & CEO of Myitronline Global Services Private Limited at Delhi. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. Visit our website for latest Business News and IT Updates.
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