CGST & Central Excise Dept’s Levy Rs.273 Crore Tax Demand On ICICI Lombard

CGST & Central Excise Dept’s Levy Rs.273 Crore Tax Demand On ICICI Lombard

Strap – Covering various states, it was for motor claims settlement

The Additional Commissioner of CGST & Central Excise, Palghar has slapped a Rs.273.44 crore penalty on ICICI Lombard General Insurance Company Ltd under the Central Goods and Services Tax (CGST) Act, 2017.

The order confirmed the tax demand of Rs.273,44,50,284 under Section 50 and a penalty of the same amount under Section 74 and Section 122 (from July 2017 to March 2022), covering various states.

It relates to an industry-wide issue on the applicability of the Goods and Services Tax (GST) on salvage and ineligible Input Tax Credit (ITC) on motor claims settlement.

The company deposited 104.13 crore under protest without accepting any liability. It held:

1. The value deduction of scrap/salvage/wreck, etc from the motor vehicle claim payable by the company amounted to supply under Section 7.

2. In case of claims settled under the reimbursement mode, the company erroneously availed and utilized the ITC on tax invoices issued in the name of the repairer/motor garages.