Shares of Bajaj Finserv, the holding company of Bajaj Finance, fell as much as 2% after its unlisted insurance arm — Bajaj Allianz General Insurance Company — received a show cause cum demand notice of ₹1,010 crore from the Directorate General of GST Intelligence, Pune.

"The alleged demand and the impugned Show Cause Cum Demand Notice pertains to non-payment of GST on the co-insurance premium accepted as a follower in case of coinsurance transactions and non-payment of GST on re-insurance commission accepted on the reinsurance premium ceded to various Indian and foreign reinsurance companies during the period July 2017 to March 2022," the company says in a regulatory filing.

The notice refers to the two matters that are industry-wide issues and based on the advice of its tax advisers, Bajaj Allianz General Insurance Company says it will be filing an appropriate response to the said show cause cum demand notice within the prescribed timelines.

Reacting to the development, shares of Bajaj Finserv opened at ₹1,555 against its previous closing price of ₹1,561 apiece on the National Stock Exchange (NSE). The stock hit an intraday low of ₹1,524.30, taking the company’s market cap to ₹2.45 lakh crore. The stock has declined 10% over the past year and 1% on a year-to-date basis.

The show cause cum demand notice alleges non-payment of GST on the co-insurance premium received as a follower in case of co-insurance transactions and non-payment of GST on re-insurance commission deducted from the reinsurance premium ceded to various Indian and foreign reinsurers.

This comes days after online gaming company Nazara Technologies received a show-cause notice stating a tax demand of ₹2.83 crore from the Director General of GST Intelligence, Mumbai. Prior to this, casino and online gaming operator Delta Corp received notices worth ₹16,822 crore from the Directorate General of GST Intelligence for payment of shortfall tax.

Meanwhile, India's biggest life insurer, Life Insurance Corporation of India on Tuesday said it has received a penalty order of ₹84 crore from the Income Tax Authority. "In the said order, the authority has demanded a penalty. The corporation shall file an appeal before the appropriate Appellate Authority against the said order within prescribed timelines," the state-owned insurer says in a stock exchange filing.

Shares of LIC slipped as much as 1% to ₹638.30 in intraday trade on the NSE, taking its market cap to ₹4 lakh crore. The insurance stock opened at ₹643 against its previous closing price of ₹645.35.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.