Life Insurance Corporation of India (LIC) has been slapped with a Goods and Services Tax (GST) demand notice totaling Rs 806 crore, including penalty and interest. The notice, received on January 1, pertains to the financial year 2017-18, with LIC stating that it will file an appeal against the order before the Commissioner (Appeals), Mumbai, within the prescribed timelines.
The demand order specifies a GST amount of Rs 3,65,02,67,702, coupled with a penalty of Rs 4,04,77,06,418 and interest of Rs 36,50,35,206, bringing the total to over Rs 806 crore. LIC clarified that despite the substantial amount, there would be no significant impact on its financials or operations.
The notice was issued based on several alleged violations, including non-reversal of input tax credit, reversal of ITC availed from reinsurance, interest on delayed payment with GSTR-3B, interest on advance received, and discrepancies in reverse charge mechanism (RCM) liability disclosures.
In response to the GST demand for the Maharashtra state, LIC stated, "Corporation shall file an appeal before Commissioner (Appeals), Mumbai against the said order within the prescribed timelines."
This development follows a similar trend in the industry, with notable food delivery platforms Zomato and Swiggy also facing GST scrutiny. Zomato recently received a notice from the Directorate General of GST Intelligence regarding an alleged tax liability of Rs 401.70 crore, while Swiggy is reported to have received a similar notice for tax amounting to about Rs 350 crore. Zomato, however, strongly contested the demand, asserting that it is not liable to pay tax on delivery charges collected from customers on behalf of delivery partners.
As LIC gears up for its appeal, the situation sheds light on the increasing scrutiny and challenges faced by major corporations in navigating GST compliance and addressing tax-related issues.
CAclubindia
