The New India Assurance Company , a prominent player in the Indian insurance sector, has received a significant tax demand from authorities related to Goods and Services Tax (GST) on co-insurance premiums. The company disclosed this development in a regulatory filing.

Tax Demand Details

The insurance giant has been served with a tax demand of ₹2,379.13 crore by the Additional Commissioner of CGST & Central Excise, Palghar Commissionerate. This demand stems from allegations that The New India Assurance Company failed to discharge appropriate GST on premium amounts received from 'Leaders' in co-insurance business operations.

Allegations and Scope

The order, numbered 10/PLG/CGST/ADC/VKA/DGGI/NEW INDIA/2025-26, outlines two main issues:

1. Non-payment of GST on premiums received as a follower in co-insurance business
2. Non-payment of GST on commission earned from reinsurance premiums ceded or paid to reinsurance companies

The demand includes both the tax amount and penalties under Section 73(9) of the CGST Act, 2017, and corresponding SGST Act, 2017, read with Section 20 of the IGST Act, 2017.

Company's Stance and Future Actions

The New India Assurance Company maintains a strong position regarding this tax demand. The company cites recent developments in GST regulations that support their stance:

• The 53rd GST Council meeting concluded that co-insurance premium and reinsurance commission transactions are to be classified as "No Supply" under Schedule III of the CGST Act, 2017.
• The Central Board of Indirect Taxes and Customs (CBIC) introduced these transactions as "No Supply" in Schedule III through Section 149 of the Finance Act.
• CBIC circular no. 244/01/2025-GST regularized GST demands on these transactions for the period July 1, 2017, to October 31, 2024, on an "As is where is" basis.

Based on these clarifications and advice from tax consultants, The New India Assurance Company believes it has a strong case to defend on merits. The company plans to initiate appropriate action against the order within prescribed timelines and will file a response highlighting their contentions with the appropriate authority.

Impact on Operations

The New India Assurance Company has stated that there is no impact on its financial, operational, or other activities pursuant to this order. The company views this as an industry-wide issue and is relying on the clarifications issued by the CBIC to support its position.

As the situation unfolds, stakeholders will be keenly watching how this tax demand is resolved and its potential implications for the insurance sector at large.

The New India Assurance Company Limited (NIACL), a prominent player in the Indian insurance sector, has announced the receipt of a substantial income tax refund amounting to Rs. 249.79 crore. This development was disclosed by the company in a regulatory filing to the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Refund Details

The refund pertains to the Assessment Year 2009-10 and includes an interest component of Rs. 8.89 crore. This significant financial inflow comes as a positive development for the state-owned insurer, potentially bolstering its financial position.

Regulatory Compliance

In adherence to the regulatory requirements set forth by the Securities and Exchange Board of India (SEBI), NIACL promptly informed the stock exchanges about this material development. The disclosure aligns with the company's commitment to transparency and compliance with listing obligations.

Company Background

The New India Assurance Company Limited, established in 1919, is a leading general insurance company in India. As a government undertaking, it plays a crucial role in the country's insurance landscape, offering a wide range of insurance products and services.

Market Implications

The substantial refund is likely to have a positive impact on the company's financials. Investors and market analysts will be keenly watching how this additional liquidity might influence NIACL's financial strategies and potential growth initiatives in the coming quarters.

The receipt of this significant tax refund underscores the importance of efficient tax management and the potential financial benefits that can accrue to companies through such processes. As the insurance sector continues to evolve in India, developments like these can play a crucial role in shaping the competitive landscape and financial health of major players like New India Assurance.