ICICI Prudential Life shares recover after slipping in early deals on GST demand notice

ICICI Prudential Life share price NSE: ICICI Prudential Life received a GST demand notice of Rs 492.06 crore from tax authorities on Monday. Post the news, the private sector life insurance company's share on Tuesday opened at Rs 561.05, down from the previous close of Rs 564.05 on the NSE. However, minutes later, the stock trimmed the losses and rose as much as over 1 per cent to touch the day's high of Rs 570.45. Last seen, the stock traded at Rs 567.25, up by Rs 3.2 or 0.57 per cent on the NSE.

ICICI Pru said in a regulatory filing, "The matter relates to an industry-wide issue of the input tax credit, and the company believes that it has availed eligible input GST credit in compliance with the provisions of the Central Goods and Service Tax (GST) Act, 2017, and other applicable laws."

The filing said the insurer has received a show cause cum demand notice (SCN) from the Directorate General of GST Intelligence (DGGI), asking the company to show cause as to why a tax of Rs 492,06,48,296 pertaining to the period July 2017 to July 2022 should not be demanded. The company would take appropriate steps in due course to reply to the SCN and contest the matter, it said.

"During the course of the inquiry, the company had deposited Rs 190 crore without accepting any liability in this regard," it said. The deposit was made in April of this year. In the last fiscal year, the Directorate General of GST Intelligence (DGGI) initiated a GST inquiry into certain expenses for which input GST credit had been claimed by the company.

In September last year, the Mumbai unit of the DGGI said an ITC of Rs 824 crore had been availed by 16 insurance companies on the basis of fake invoices. Out of this, insurers voluntarily paid Rs 217 crore after the DGGI investigation. DGGI investigations revealed that these insurers were actually paying commissions beyond IRDAI's permissible limit to their corporate agents in the garb of expenses related to marketing and brand activation.

ICICI Prudential Life's share price target 2023

CLSA has maintained a buy rating on ICICI Prudential Life Insurance and has raised its target to Rs 700 from Rs 575.

ICICI Prudential Life share price history

ICICI Prudential Life's stock has given a positive return of nearly 15 per cent in the last 12 months (since June 27, 2022). In comparison, the headline index, Nifty 50, has rallied over 18 per cent.

(with PTI inputs)

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