Life Insurance Corporation (LIC) of India has been hit with a GST demand and penalty order totalling Rs 605.5 crore for the fiscal year 2019-20 (FY20). In a regulatory filing to the stock exchanges, the leading life insurer disclosed that the order is appealable before the Joint Commissioner of State Tax (Appeals), Mumbai.
The demand order from the Deputy Commissioner of State Tax in Mumbai includes Rs 294.4 crore in GST, Rs 281.7 crore in interest, and a Rs 29.4 crore penalty. The issue stems from the alleged wrong availment and short reversal of Input Tax Credit (ITC) and interest on late payments.
LIC clarified that the demand has no material impact on its financials, operations, or other activities. Despite the significant amount involved, the insurance giant assured stakeholders that it is addressing the matter appropriately and will file an appeal against the order.
This is not the first GST-related challenge LIC has faced. In March 2024, the corporation received a demand notice from the Additional Commissioner of Central GST and Central Excise in Jamshedpur, imposing a penalty of approximately Rs 178 crore for short payment of GST over two financial years.
In other news, LIC recently handed over a dividend cheque of Rs 3,662.17 crore to Finance Minister Nirmala Sitharaman. This comes after an interim dividend payment of Rs 2,441.45 crore made on March 1, 2024, bringing the total dividends paid to the Centre for the year 2023-24 to Rs 6,103.62 crore. With an asset base exceeding Rs 52.85 lakh crore, LIC remains a financial powerhouse in India's insurance sector.
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