LIC receives GST demand of ₹183 cr; stock falls

Shares of Life Insurance Corporation of India (LIC), country’s largest life insurer, slashed as much as 0.78% to ₹770.45 apiece on BSE today after it got a GST notice from the Telangana government. The insurance company has received a Goods and Service Tax (GST) notice for approximately ₹183 crore, which comprises pending dues, penalty and interest, from the Telangana arm of the taxation authority. Finally the stock settled 0.43% lower at ₹770.45. 

The filing states demand order-cum-penalty notice pertains to FY 2017-18. Out of the total tax demand, ₹81 crore is in the form of pending GST dues, along with a penalty of around ₹93 crore, and interest of around ₹8 crore. The company has been charged with ‘excess input tax credit claimed under reverse charge mechanism’ and ‘short payment under reverse charge mechanism’.

As per the filing, the insurer will challenge the tax demand before the Appellate Joint Commissioner (ST), Hyderabad Rural Division. The GST notice will not have any material impact on financials, operations or other activities of the corporation, the filing added.

In October this year, LIC received ₹84 crore-penalty notice from the Income Tax Department, pertaining to the tax filings during the assessment years 2012-13, 2018-19, and 2019-20. Besides, the company received another GST notice of ₹290 crore from the Bihar- Additional Commissioner State Tax (Appeal), Central Division, Patna, in September 2023.

In a separate release, LIC said that it has approved infusion of share capital of ₹25 crore in LIC Mutual Fund Asset Management Limited on a preferential basis.