Life Insurance Corporation of India (LIC) has been served a Goods and Services Tax (GST) demand notice of Rs 3,529 crore by Mumbai's tax authorities. This comes in addition to a series of notices received earlier this month, totaling significant amounts and spanning various states.
In response to the recent Mumbai notice, LIC assured in an exchange filing on Thursday that the demand will not impact the company's finances or other operations. The insurance giant is set to file an appeal before the Commissioner of Income Tax, emphasizing its commitment to contesting the claims.
This development follows a cascade of GST demand notices received by LIC in early January. On January 5, the company disclosed a demand notice of Rs 382 crore from the tax authorities in Gujarat, covering GST collections, interest, and penalties for the fiscal years 2018-19.
Furthermore, on January 3, LIC faced a combined demand notice of Rs 667.5 crore from tax authorities in Tamil Nadu, Uttarakhand, and Gujarat. The GST demand from Tamil Nadu amounted to Rs 663.45 crore, while Uttarakhand and Gujarat sought Rs 4.28 crore and Rs 39.39 lakh, respectively.
Notably, LIC had already received a GST demand notice of Rs 806.3 crore from Maharashtra tax authorities on January 1, marking a series of tax-related challenges for the insurance behemoth.
Despite these tax hurdles, LIC remains steadfast in its assertion that these demands will not adversely affect its financial standing or ongoing operations. The company closed its shares 0.51% lower at Rs 834 apiece, compared to a marginal 0.09% rise in the benchmark BSE Sensex. The unfolding scenario raises questions about the broader implications of tax scrutiny on one of India's leading financial institutions, and the appeal process will be closely watched by stakeholders for its potential impact on the insurance giant's financial landscape.
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