LIC gets GST Demand Notice of Rs.3529 Crore from Mumbai Tax Authority

Mumbai’s tax officials have slapped Life Insurance Corporation of India (LIC) with a Goods and Services Tax (GST) demand notice for Rs 3,529 crore.

This is in addition to a series of notices received earlier this month, which totalled large amounts and covered multiple states.

In response to the latest Mumbai notice, LIC stated in an exchange filing on Thursday that the demand will have no influence on the company’s finances or other operations. The insurance company is preparing to file an appeal with the Commissioner of Income Tax, emphasising its determination to oppose the charges.

This development follows a series of GST notices received by LIC in early January. On January 5, the company disclosed a demand notice of Rs 382 crore from Gujarat’s tax authorities, which covered GST collections, interest, and penalties for the financial year 2018-19.

Furthermore, on January 3, LIC received a joint tax demand notice for Rs 667.5 crore from tax authorities in Tamil Nadu, Uttarakhand, and Gujarat. The GST demand from Tamil Nadu was Rs 663.45 crore, while Uttarakhand and Gujarat wanted Rs 4.28 crore and Rs 39.39 lakh, respectively.

Notably, LIC had already got a GST demand notice of Rs 806.3 crore from Maharashtra tax officials on January 1, setting off a series of tax-related issues for the insurance company.

Despite these tax barriers, LIC maintains that these demands will have no negative impact on its financial position or ongoing operations. The company’s shares closed 0.51% lower at Rs 834 each, while the benchmark BSE Sensex rose only 0.09%.

The emerging scenario raises concerns about the larger implications of tax scrutiny on one of India’s leading financial institutions, and stakeholders will closely monitor the appeals process for any potential impact on the insurance giant’s financial situation.