The Life Insurance Corporation of India (LIC) on December 11 said it has received a Goods and Service Tax (GST) notice for Rs 183 crore, which includes pending dues, penalty and interest, from the Telangana arm of the taxation authority.
The “demand order-cum-penalty notice” pertains to fiscal year 2017-18, LIC said. The company has been asked to pay Rs 81.2 crore in the form of pending GST dues, along with a penalty of Rs 93.2 crore and interest of Rs 8.1 crore.
The state-run insurer said it has been charged with “short payment under reverse charge mechanism” and claiming “excess input tax credit”.
The order can be challenged before the Appellate Joint Commissioner (ST), Hyderabad Rural Division, LIC informed the stock exchanges. The GST notice has no material impact on financials, operations or other activities of the corporation, it added.
At the time of disclosure, however, LIC shares dropped by Rs 11.10 or 1.42 percent from the day’s high. At the closing bell, the scrip was valued at Rs 770 on the BSE, down 0.49 percent as against the previous day’s close.
The development comes over two months after Bihar slapped a Rs 290-crore GST bill on LIC. This included a tax demand of Rs 166.75 crore, an interest of Rs 107.05 crore and a penalty of Rs 16.67 crore.
The state tax officials, in their notice, said the insurer was being penalised for the “non-reversal of the Input Tax Credit (ITC) availed and utilised on the item non-leviable to GST on the portion of the premium received by the Corporation from the policyholder and the non-reversal of the ITC of the portion of the agent’s commission on the item non-leviable to GST on the portion of the premium and the exempted policies.”
This was followed by the LIC receiving Rs 84 crore-penalty notice from the Income Tax Department on October 3. The penalty was imposed concerning the tax filings during the assessment years 2012-13, 2018-19 and 2019-20, the company had informed the exchanges, adding that it would be filing an appeal against the order.