ICICI Lombard faces Rs.273 cr tax demand under GST for motor claims settlement
ICICI Lombard General Insurance Company Limited has now received an order confirming tax demand of Rs. 273,44,50,284/- under Section 74 of the Central Goods and Services Tax Act, 2017 along with interest u/s 50 and levying a penalty of Rs. 273,44,50,284/- under Section 74 read with Section 122 of the Act for the period July 2017 to March 2022 covering various states, according to the Company's exchange filing.
Additional Commissioner of CGST & Central Excise, Palghar Commissionerate order relates to an industry-wide issue with respect to the applicability of GST on salvage and ineligible Input Tax Credit, on motor claims settled.
The order has held that: 1. The deduction of value of scrap/salvage/wreck etc. from the motor vehicle claim payable by the Company amounts to supply in terms of Section 7 of the CGST Act; 2. In case of claims settled under the reimbursement mode, the Company has erroneously availed and utilised ITC on the strength of tax invoices issued by the repairer/motor garages in their name.
The Company had deposited an amount of Rs. 104,13,18,970 under protest, without accepting any liability in this regard which was disclosed in the financial statements for the financial year ended March 31, 2024. The aforesaid Order seeks to appropriate the amount of Rs. 104,13,18,970/- deposited under protest by the Company.
