LIC slapped with GST Notice of Rs. 183 crore from Telangana Tax Authority

The Telangana department of the tax authorities sent a Goods and Services Tax (GST) notice to the Life Insurance Corporation of India (LIC) on December 11. The notice included interest, penalty, and outstanding payments totalling Rs. 183 crore.

The “demand order-cum-penalty notice” is relevant to the 2017-18 financial year, according to LIC. The corporation is required to pay interest of Rs. 8.1 crore, a penalty of Rs. 93.2 crore, and Rs. 81.2 crore in outstanding GST.

A “short payment under reverse charge mechanism” and a claim for an “excess input tax credit” have been made, according to the state-run insurance.

As the Life Insurance Corporation of India (LIC) informed the stock exchanges, the order may be contested by the Hyderabad Rural Division’s Appellate Joint Commissioner (ST). The corporation stated that the GST notice has no appreciable effect on its operations, finances, or other business activities.

LIC shares, however, had fallen 1.42 percent, or Rs. 11.10, from the day’s high at the time of disclosure. After a 0.49 percent decrease from the previous day’s closure, the scrip’s value on the BSE was Rs. 770 at the closing bell.

The event occurred more than two months after Bihar hit LIC with a GST bill totalling Rs 290 crore. This included a tax demand of Rs 166.75 crore, an interest of Rs 107.05 crore and a penalty of Rs. 16.67 crore.

In their notice, the state tax authorities stated that the insurer was being penalised for the following: “the non-reversal of the Input Tax Credit (ITC) of the portion of the agent’s commission on the item non-leviable to GST on the portion of the premium and the exempted policies and the non-reversal of the ITC availed and utilised on the item non-leviable to GST on the portion of the premium received by the Corporation from the policyholder.”

The Income Tax Department then sent a penalty notice of Rs. 84 crore to the LIC on October 3. The company notified the exchanges that a penalty had been levied on the tax filings during the assessment years 2012-13, 2018-19, and 2019-20. The company had notified the exchanges that they planned to file an appeal against the order.