India’s largest non-life insurer is known for its extensive coverage and market leadership. But why this major player recently received a substantial GST notice demanding Rs 2,298 crore. We will be delving into the reasons behind the claim and the potential implications for the company.
The New India Assurance Limited’s stock, with a market capitalisation of Rs. 30,524 crores, fell to Rs. 185.63, hitting the low of up to 0.7 percent from its previous closing price of Rs. 184.30. Furthermore, the stock over the past year has given a negative return of 20.3 percent.
Why this GST Notice
New India Assurance has received a notice from tax authorities asking to show cause as to why the company should not pay the alleged amount of Rs. 2,298 crore in Goods and Services Tax (GST) for the period between April 2018 and March 2023. The company stated in its filing that it believes it has a strong legal case and will respond to the notice accordingly.
The notice was issued on June 26, 2025, by the Additional Commissioner in Mumbai-South under Sections 74 and 123 of the Central and Maharashtra GST Acts, 2017. It was sent in Form DRC-01, which formally asks the company to explain why the GST amount should not be collected from them.
According to the notice, the tax department claims there were issues like unpaid or underpaid GST, incorrect tax refunds, or wrongly claimed input tax credits. These actions are suspected to be due to fraud, intentional misreporting, or hiding information, as mentioned under Section 74(7). The notice also points out the company’s alleged failure to submit required tax documents on time under Section 123.
Response By Company
“Based on the advice of our tax consultants, the company is in the process of filing a detailed reply highlighting the contentions of the company with the Adjudicating Authority within the prescribed timelines,” the company stated.
Q4 Financial Highlights
The company reported revenue of Rs. 11,664 crore in Q4FY25, flat YoY compared to Rs. 11,686 crore in Q4FY24. However, revenue grew 9 percent sequentially from Rs. 10,703 crore in Q3FY25. Profit rose 14 percent YoY to Rs. 356 crore from Rs. 313 crore in Q4FY24 and grew 2 percent QoQ from Rs. 349 crore in Q3FY25.
Over the last three years, the company has maintained a solid performance with a 73 percent profit CAGR and 7 percent sales CAGR. Return on equity has grown at a modest 1 percent CAGR during the same period, indicating consistent earnings improvement but limited enhancement in capital efficiency.
Written By Fazal Ul Vahab C H
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