LIC receives Rs.605.5 Crore GST Demand Notice for FY20

The Life Insurance Corporation (LIC) received a Rs.605.5 crore GST Demand Notice for the financial year 2019-20.

According to a regulatory filing by the biggest life insurer with the stock exchanges, the order is subject to appeal to the Joint Commissioner of State Tax (Appeals), Mumbai.

“The corporation got a communication/demand order for interest and penalty for Maharashtra,” LIC stated in a regulatory FILING.

The issue is related to the wrongful availment and brief reversal of the Input Tax Credit (ITC) and interest on late payments.

“There is no significant effect on the financials, operations, or other activities of the insurance behemoth,” said LIC.

According to the LIC’s exchange filing, the GST demand notice includes a GST of Rs.2,94,43,47,220 with interest of Rs.2,81,70,71,780 and a penalty of Rs.29,44,73,582.

Hence, the Deputy Commissioner of State Tax in Mumbai issued LIC a GST notice for Rs.294 crore, along with Rs.281 crore in interest and a penalty of Rs.29 crore. In March 2024, the LIC got a demand notice from the Additional Commissioner of Central GST and Central Excise in Jamshedpur requesting a penalty of around Rs.178 crore for failing to pay GST for two years.

LIC also gave Finance Minister Nirmala Sitharaman a dividend cheque for Rs.3,662.17 crore on Thursday. Siddhartha Mohanty, LIC’s Chief Executive Officer (CEO) and Managing Director (MD) delivered the cheque to the Finance Minister.

An interim dividend of Rs.2,441.45 crore was also paid by LIC to the Centre on March 1, 2024, bringing the total to Rs.6,103.62 crore for the financial year 2023-24. LIC has an asset base of over Rs.52.85 lakh crores.