Canara HSBC Life Insurance Company has received a goods and services tax (GST) demand totalling 48m rupees (US$515,890) for the financial year 2019-20, issued by the Deputy Commissioner of the Uttar Pradesh GST authority in Lucknow, according to a stock exchange filing.
The demand, received on 30 March, comprises 15.1m rupees in tax, 17.9m rupees in interest, and an equal penalty of 15.1m rupees. It stems from allegations that the insurer improperly claimed input tax credits (ITC) in contravention of Sections 16 and 17 of the Central Goods and Services Tax Act, and that ITC claimed in its GST returns exceeded amounts reflected on the GST portal.
Canara HSBC Life said it considers the demand unsustainable and intends to file an appeal before the relevant appellate authority. The company added that it does not anticipate any material impact on its financials or operations.
The dispute adds to a growing list of GST-related demands hitting India’s insurance sector. ICICI Lombard General Insurance recently secured a Bombay High Court stay on a 623.6m rupee GST demand relating to group insurance policies supplied to Special Economic Zone units, while Go Digit General Insurance is contesting a 1.55bn rupee demand and considering a writ petition, citing the matter as an industry-wide issue.
