The New India Assurance Company Limited has informed regarding Disclosure of Show Cause Notice received by the Company
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On the reaction day the stock moved 1.5 pts less than Nifty Midcap 150 and 1.2 pts less than its General Insurance peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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New India Assurance has received a Show Cause Notice (SCN) from the Office of the Additional Commissioner, Mumbai-South, Maharashtra under Sections 74 and 123 of the CGST/MHGST Act, 2017. The notice alleges an outstanding GST demand of approximately Rs. 2,298 crore (Rs. 22,98,06,74,252) for the period April 2018 to March 2023. The allegations relate to tax not paid/short paid or input tax credit wrongly availed, and failure to furnish information returns. The company has stated it believes it has a strong case on merit and is preparing a detailed reply through its tax consultants. The company has also stated that there is no immediate impact on its financial or operational activities from receiving the notice.
While the potential demand of ~Rs. 2,298 crore is large, this is only a show cause notice and not a final order. The company is contesting it and the matter is at an initial stage. Short-term sentiment may be mildly negative due to the size of the demand, but the company's claim of no financial impact and its intention to contest suggest limited immediate risk to shareholders. The outcome will depend on the adjudication process.