ICICI Lombard General Insurance shares dropped sharply on Thursday after the firm received a notice from the Directorate General of GST Intelligence (DGGI), alleging unpaid taxes of ₹1,728.86 crore.

What Happened: The insurer said in an exchange filing that it received a “show cause-cum-demand notice from the Directorate General of GST Intelligence, Pune Zonal Unit” under the Central Goods and Services Tax Act on Wednesday.

ICICI Lombard clarified that the alleged demand pertains to unpaid GST on co-insurance premiums and reinsurance commissions related to various Indian and foreign reinsurance companies from July 2017 to March 2022.

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The company stated that the “show cause cum demand notice (SCN) pertains to industry-wide issues” and that it will take appropriate steps to respond to the notice based on advice from its tax advisers.

Why It Matters: This development comes shortly after the appointment of Sanjeev Mantri as the new managing director and chief executive officer of the company.

This is the second tax notice the company received in three months. In July, it was served a notice for a tax liability of ₹273.44 crore under the Central Goods and Services Tax Act, along with interest charges and a penalty.

In June, ICICI Prudential Life, another insurance company under ICICI, received a notice from the DGGI for unpaid taxes of ₹492.06 crore over a five-year period starting from July 2017.

Price Action: ICICI Lombard’s share price was down nearly 1.5% at ₹1,284.25 in morning trade on Thursday.

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