Go Digit secures relief in Rs 170 crore GST dispute as Bombay High Court orders fresh review

Go Digit General Insurance has secured temporary relief in a long-standing tax dispute after the Bombay High Court overturned a Rs 170.29 crore demand raised by tax authorities and instructed a reassessment.

The demand, initially issued by the Chennai South Commissionerate of GST and Central Excise, included Rs 154.80 crore in tax liabilities and an additional Rs 15.48 crore in penalties, spanning the period from July 2017 to March 2022. The High Court observed that the matter related to a broader industry-wide issue that had already been considered by the GST Council, which had issued guiding circulars on the subject.

In its order dated July 4, the court directed the adjudicating authority to re-examine the case based on the GST Council’s guidance and complete the process within three months. Go Digit confirmed that it received a copy of the court order on July 4 at 6:12 p.m. and is currently reviewing legal options.

“This matter primarily relates to an industry-wide issue,” the company said in a stock exchange disclosure. “The High Court has directed the adjudicating authority to reconsider the case based on the GST Council’s guidance.”

The insurer, which went public in May 2024, had flagged the tax dispute in its IPO filings under “Material Tax Proceedings.” The company clarified that there are no financial implications from the court order at this stage and no penalties or restrictions have been imposed following the judgment.

The court’s decision comes on the heels of strong quarterly performance by the Bengaluru-based insurtech firm. For the quarter ended March 31, Go Digit reported a 119.5% year-on-year rise in profit after tax to Rs 115.61 crore, up from Rs 52.66 crore in the corresponding period last year.

Gross premiums written during the quarter rose 10.29% to Rs 2,576.38 crore, compared with Rs 2,335.91 crore a year ago. Total income grew 6.04% year-over-year to Rs 2,855.18 crore, while total expenses increased 5.08% to Rs 2,426.12 crore.

For the full fiscal year ending March 2025, the company’s net profit surged 133% to Rs 425 crore, according to recent financial disclosures.

Go Digit noted that it has not yet taken any formal action in response to the order and awaits service of the final certified copy. “The company is in the process of evaluating legal advice on the implications of the said order,” it said.