Bajaj Allianz, a prominent insurance company, has been served with a significant Goods and Services Tax (GST) demand notice of Rs. 1010 crore by the government authorities. The Directorate of GST Intelligence (DGGI), responsible for enforcing GST regulations, has taken action against the company due to its apparent omission in paying GST on premiums related to co-insurance and re-insurance.
The demand notice also includes a requirement for Bajaj Allianz to furnish a show cause explanation, elucidating the reasons behind its non-compliance with GST payment obligations. This development was reported by Bajaj Finserv in its filing with the stock exchange on the same day.
“Bajaj Allianz General Insurance Company Limited (“BAGIC”), an unlisted material subsidiary of the Company, has received a Show Cause Cum Demand Notice from the Directorate General of GST Intelligence, Pune Zonal Unit, under Section 73(1) of the Central Goods and Services Tax Act, 2017 (“the Act”), on 29 September 2023 alleging a tax demand of Rs. 1010,05,80,540/,” stated the company in its BSE filing.
The company received a show cause notice pertaining to its failure to remit Goods and Services Tax (GST) for two specific issues spanning from July 2017 to March 2022. The contentious matter at hand revolves around GST payments associated with these two types of premiums. It’s worth noting that this issue has been a source of disagreement between various companies and the government.
Aside from Bajaj Allianz, several other insurance firms have also found themselves in a similar situation, receiving comparable notices from the Directorate of GST Intelligence. This suggests that the government’s scrutiny on GST compliance regarding these specific premiums extends beyond just one company and is part of a broader enforcement effort within the insurance industry.
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