ICICI Prudential trades flat after getting Rs 492-crore GST notice

ICICI Prudential Life Insurance was trading flat on June 27 morning, a day after the insurer said that it was slapped with a goods and services tax (GST) liability of Rs 492 crore.

The insurer told the exchanges a day earlier that the Directorate General of GST Intelligence had issued a show-cause-cum-demand notice for non-payment of tax of Rs 492.06 crore from July 2017 to July 2022.

ICICI Prudential is the latest insurer to get such a notice. In the previous week, rival HDFC Life Insurance received a GST demand notice for Rs 942 crore for the period between July 2017 and March 2022.

Like HDFC Life Insurance, ICICI Prudential, too, said it would contest the matter. The company said it was eligible for GST credit compliance as per the GST Act, 2017. The company also deposited Rs 190 crore without accepting liability in the case.

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“The company shall take appropriate steps in due course to reply to the SCN and contest the matter,” ICICI Prudential told stock exchanges.

“The matter largely relates to an industry-wide issue of 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 Act, 2017 and other applicable laws”.

At 10.42 am the ICICI Prudential stock was trading 0.053 percent higher at Rs 564.05 on NSE.

Brokerage views

In a report released on June 27, CLSA said it has a “buy” rating on ICICI Prudential Ltd stock with a target price of Rs 700 a share, more than 20 percent upside from the current market price.

The focus of the company will be on annual premium equivalent (APE) along with multiple levers going ahead. The firm is expected to show robust growth levels with optionality of higher growth, the brokerage said.

Stock Performance

ICICI Prudential has given a return of 25.16 percent over the last six months, outperforming the benchmark Nifty that gained 3.26 percent during the same period.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.