LIC shares trade in red on Rs. 800cr GST notice
Shares of insurance giant Life Insurance Corporation of India (LIC) traded 1.5% lower at Rs. 851.30 in early trade on January 2 after the company was slapped a Rs. 806-crore GST notice. Maharashtra's deputy commissioner of state tax issued the notice citing compliance-related shortcomings in FY 2017-18. The notice comprises Rs. 365.02 crore in GST dues, a penalty of Rs. 404.7 crore, and an interest payment of Rs. 36.5 crore.
What is LIC accused of?
According to GST officials, LIC failed to adhere to various regulations, including the non-reversal of input tax credit as per CGST rules 37 and 38, and the reversal of input tax credit availed from reinsurance. The GST officials have also imposed interest on the dues as a result of delayed payment made with GSTR-3B and interest on advance received. LIC also reported lower reverse charge mechanism liability than what its suppliers had indicated.
LIC to file an appeal against order
LIC plans to appeal the order before the commissioner. In a regulatory filing, the insurer stated that this would not have a significant impact on its financials, operations, or other activities. This is just one of several GST notices LIC has received from states across India. In October 2023, the GST authorities fined LIC Rs. 36,844 for underpayment of taxes.
Other GST notices received by LIC from different states
On September 22, LIC received a GST receipt from Bihar state tax officials totaling over Rs. 290 crore, which included a tax demand of Rs. 166.75 crore, an interest of Rs. 107.05 crore, and a penalty of Rs. 16.67 crore. Additionally, on December 11, Telangana's taxation authority issued a GST notice to LIC for Rs. 183 crore, encompassing pending dues, penalty, and interest.
