Did New India Assurance Just Receive a Rs 2,379 Crore GST Demand Notice?
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Synopsis
New India Assurance has found itself under scrutiny with a staggering GST demand notice of Rs 2,379 crore. The company is confident about its legal standing and intends to challenge the notice. This situation raises questions about compliance and regulatory practices in the insurance sector.
Key Takeaways
- New India Assurance received a GST demand notice of Rs 2,379 crore.
- The notice was issued by the Additional Commissioner of Central GST.
- The company claims a strong defense against the allegations.
- Company shares rose 0.55% despite the notice.
- Stock has seen a 17.94% decline in the past year.
New Delhi, Sep 30 (NationPress) – On Tuesday, New India Assurance Company Limited announced that it has been served with a Goods and Services Tax (GST) demand notice amounting to Rs 2,379 crore.
This notification was issued by the Additional Commissioner of Central GST, Palghar Commissionerate, as detailed in a stock exchange disclosure made by the company.
In their filing, the company stated, "In reference to the above, we wish to inform that the company has received the original order in form DRC-07, dated 29/09/2025, under Rules 100(1), 100(2), 100(3), & 142(5) of the CGST/MHGST ACT 2017 from the Additional Commissioner CGST & Central Excise Palghar Commissionerate."
The demand was raised due to the alleged failure to pay GST on premiums received as a follower in the co-insurance business, as well as on commissions earned from reinsurance premiums paid to reinsurance firms.
The notice states that NIA did not discharge the requisite GST on the premium amounts received from the respective 'Leader' in the co-insurance sector and failed to address any GST liability on the 'reinsurance commission' earned from the ceded reinsurance premium.
Nevertheless, the insurance provider asserted that this order would not impact its financial or operational activities.
They cited a clarification from the Central Board of Indirect Taxes and Customs (CBIC) and the guidance of their tax consultants, claiming a solid case to defend their position.
The company indicated that it would take the necessary actions within the designated timelines and present its response to the authorities.
On Tuesday, shares of New India Assurance rose by 0.55%, closing at Rs 189.10 each on the National Stock Exchange (NSE), despite the benchmark Nifty declining by 0.1%.
Over the past year, the stock has decreased by 17.94% and has dropped 6.63% year-to-date in 2025.
Point of View
The recent GST demand notice directed at New India Assurance raises critical concerns about regulatory compliance in the insurance industry. The company’s response indicates confidence in their legal position, but it also emphasizes the ongoing complexities within tax regulations that could affect numerous stakeholders.
NationPress
30/09/2025
Frequently Asked Questions
What is the reason behind the Rs 2,379 crore GST demand notice?
The demand notice was issued due to alleged non-payment of GST on premiums received in the co-insurance business and commissions from reinsurance premiums.
How does New India Assurance plan to respond to the GST notice?
The company has stated that it will take appropriate action within the prescribed timelines and file a response to the authorities, citing a strong case for defense.
Will this GST demand notice impact New India Assurance's operations?
The firm has assured that the order will not affect its financial or operational activities.
