In a recent development, Star Health and Allied Insurance Company Ltd disclosed receiving a significant tax demand order amounting to Rs 170 crore, coupled with a penalty of Rs 8.7 crore, pertaining to alleged non-payment of GST liability on re-insurance commission received during the fiscal year spanning April 2018 to March 2019. The demand order, issued by the Office of the Deputy Commissioner (ST)-II, Large Taxpayers Unit, Chennai-35, under Section 73 of the Central Goods and Services Tax Act, 2017, has spurred the insurance firm into action.
In response to the regulatory filing, Star Health announced its intention to challenge the demand order within the stipulated timelines, guided by advice from its tax advisors. The company maintains confidence in the strength of its case against the levy of demand, interest, and penalty. However, it also acknowledges the uncertainty surrounding the case's outcome and its potential financial implications.
Despite the looming tax challenge, Star Health recently reported a robust financial performance. In the quarter ending December, the private health insurer recorded a 37.6% year-on-year increase in profit, amounting to Rs 289.6 crore. This growth trajectory was further supported by a 16.4% rise in gross written premium, reaching Rs 3,605.8 crore compared to the previous year's Rs 3,096.7 crore. Additionally, the net premium earned during the same period witnessed a 7.1% year-on-year upsurge, totaling Rs 3,151.9 crore.
The juxtaposition of these financial achievements against the backdrop of the tax dispute underscores the resilience and operational strength of Star Health and Allied Insurance Company Ltd. As the company navigates through the legal proceedings, stakeholders remain watchful of its strategic responses and the eventual resolution of the matter, keeping a keen eye on its financial stability and market standing.
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