New India Assurance faces ₹23.8 bn tax demand, plans to challenge

The New India Assurance Company disclosed receiving an Order In Original (DRC-07) dated September 29, 2025, from the additional commissioner CGST & Central Excise Palghar Commissionerate. The order alleges a tax demand of ₹23,791,348,877, including penalties, under the CGST Act, 2017, and related acts. The demand stems from alleged failures to discharge appropriate GST on premiums received from 'Leader' companies in co-insurance businesses and on 'reinsurance commission' earned from ceded reinsurance premiums.

Despite the demand, the company plans to challenge the order, citing clarifications from the 53rd GST Council meeting on June 22, 2024, and subsequent CBIC circulars. These pronouncements declare co-insurance premium and reinsurance commission transactions as "No Supply" under Schedule III of the CGST Act, 2017, with past cases to be regularized on an "As is where is" basis, covering the period from July 1, 2017, to October 31, 2024.

The company believes it has a strong case to defend on merits, based on advice from tax consultants and the issued clarifications. It will initiate appropriate action within prescribed timelines, filing a response highlighting its contentions. The company asserts that the order's receipt has no impact on its financial, operational, or other activities, as it pertains to an industry-wide issue addressed by CBIC clarifications.