Page 8 - Insurance Times November 2023

Non-life insurers' monthly Bajaj Allianz gets Rs. 1,010 The appointment comes after the Fi-
nancial Services Institution Bureau
premia increase 15% in crore tax demand from (FSIB) recommended Narayanan as the
H1 GST intelligence head of GIC Re in June 2023, following
The Directorate General of Goods and which his position was approved by the
Non-life insurance companies wit- Finance Ministry.
nessed a 14.86 per cent year-on- Services Tax Intelligence (GST) has is-
sued a tax demand and Show Cause Cum
year (Y-o-Y) increase in their monthly Narayanan joined GIC Re as a direct
premia in the first half of 2023-34, Demand Notice to Bajaj Allianz General recruit officer in 1988 and has since
driven by strong performance Insurance Company worth Rs 1,010 managed a spectrum of non-life insur-
across major companies, according crore for alleged non-payment of taxes ance classes, including Fire, Engineer-
to data from General Insurance during July 2017 to March 2022. ing, Miscellaneous, Motor, Liability,
Council. "Please note that Bajaj Allianz General Aviation, Marine, and Agriculture.
Insurance Company Limited ('BAGIC'),
In September 2023 alone, general
an unlisted material subsidiary of the
insurers saw their premia rise by Reliance General Insur-
Company, has received a Show Cause
29.06 per cent to Rs 23,706.35 ance Co gets Rs. 923 crore
crore, up from Rs 18,999.90 crore Cum Demand Notice from the Direc-
in the same month of the previous torate General of Goods and Services GST notices
year. Tax Intelligence, Pune Zonal Unit, un- Reliance General Insurance Company
der Section 73(1) of the Central Goods
Public sector general insurers, in the and Services Tax Act, 2017 ('the Act'), has received show cause notices
past six months, experienced a on 29 September 2023, alleging a tax amounting to nearly Rs 923 crore from
surge of 30.64 per cent in premia, demand of Rs 1,010,05,80,540," the the Directorate General of GST Intelli-
while private insurers recorded an exchange filing. gence. According to sources, the com-
increase of 21.49 per cent. pany has received four notices from the
The notice claims that the general in- DGGI demanding GST on the revenue
Among insurers, industry leader surer has not paid GST on reinsurance
New India Assurance witnessed an generated from services like re-insur-
premium, despite receiving commis- ance and co-insurance.
11.74 per cent increase in premia
sions from co-insurance companies.
to Rs 2,885.73 crore. Major private According to a tax expert, the RGIC
players Bajaj Allianz General Insur- "The alleged demand and the im- auditors will have to provide for this
ance and ICICI Lombard General pugned Show Cause Cum Demand No- amount in its quarterly results ending
tice pertain to non-payment of GST on
Insurance saw their premia grow by September 30, as a contingent liabil-
the co-insurance premium accepted as
50 per cent and 13.80 per cent, re- ity. RGIC is undergoing a debt resolu-
spectively. a follower in case of co-insurance trans- tion process through NCLT. The GST
actions and non-payment of GST on re-
National Insurance led public sector Authority's contention is that re-insur-
insurance commission accepted on the
companies with a 120 per cent YoY ance commission forms part of the rev-
reinsurance premium ceded to various
jump in premia to Rs 2,314.84 crore. Indian and foreign reinsurance compa- enue recorded by the company in its
Standalone Health Insurance (SAHI) nies during the period July 2017 to books of accounts and thus it needs to
premia increased by 22.92 per cent March 2022," the filing added. pay GST on the same.
in September 2023 to Rs 2,693.91 The company says the lead insurer has
crore, from Rs 2191.66 crore in Sep- discharged its GST liability on the en-
tember 2022. Ramaswamy Narayanan tire premium, therefore, there is no
reappointed GIC Re CMD
In terms of market share, public sec- need for it to pay GST on the
tor general insurers held 31.99 per GIC Re has appointed Ramaswamy realisation of follower premium. But,
cent of the overall insurance indus- Narayanan as Chairman and Managing the GST department is of the opinion
try in September 2023, down Director, effective October 1. that there is no provision in the GST Act
slightly from 32.76 per cent in Sep- He will replace Devesh Srivastava, where one registered person can col-
tember 2022, due to a decrease in whose four-year term ended at the lect and disburse tax on behalf of an-
the market share of New India As- close of September 2023 as he at- other, regardless of any co-insurance
surance and United India Assurance. tained the age of 60 years. arrangement.

8 November 2023 The Insurance Times