In a recent development, Care Health Insurance Ltd (CHIL), a significant subsidiary of Religare Enterprises Ltd (REL), finds itself in the midst of a fiscal challenge. The company has received a GST demand notice totaling ₹39.5 crore, encompassing penalties and interest.
This notice, issued on December 30, 2023, by the Principal Commissioner Central Goods & Service Tax & Central Excise Commissionerate at Chandigarh, presents a noteworthy obstacle for the insurance giant.
Breakdown
The detailed breakdown of the demand notice reveals a GST demand of ₹35.92 crore, accompanied by a penalty of ₹3.59 crore and interest. This intricate financial puzzle adds complexity to the situation, prompting CHIL to consider its options. The company, in response, has decided to file an appeal against the order, following the guidance of tax consultants.
Industry-Wide GST Issues
Digging deeper into the matter, the demand order is linked to industry-wide issues, specifically concerning non-payment of GST on co-insurance premiums and reinsurance commissions. The period in question spans from July 2017 to March 2022.
In co-insurance transactions, leaders had paid 100% GST on behalf of followers, leading to a complex scenario. Furthermore, non-payment of GST on reinsurance commission for premiums ceded to various reinsurance companies during the same period adds another layer to the challenge.
Shared Predicament
It’s important to note that Care Health Insurance is not alone in facing such fiscal challenges. Towards the end of December 2023, several Indian entities, spanning various industries, received GST demand notices.
Notable names include Zomato, Hindustan Lever, Life Insurance Corporation, and Nestle. The common thread among them is the commitment to appeal against the GST demand orders, signaling a shared determination to address these challenges.
Appeal Process
CHIL’s decision to appeal against the order aligns with the broader industry trend. The insurance giant, like its counterparts, recognizes the significance of presenting its case before the appropriate appellate forum. The outcome of these appeals could have far-reaching implications for how industry-wide GST issues are addressed and resolved.
Conclusion
Care Health Insurance’s ₹39.5 crore GST demand notice underscores the broader challenges faced by industry players. As the company navigates this complex terrain, the appeal process will likely shed light on the interpretation and resolution of GST-related matters in the insurance sector.
