Tax Department issues GST demand notice of Rs 606 crore to LIC

New Delhi: Life Insurance Corporation of India (LIC), the country's largest insurance provider, has been hit with a substantial demand notice from tax authorities. The notice, amounting to approximately Rs 605.58 crore, is related to the short payment of Goods and Services Tax (GST) for the financial year 2019-20.

In a regulatory filing, LIC disclosed that it received the demand order from the Deputy Commissioner of State Tax, Mumbai, which covers a GST amount of Rs 294 crore, along with an interest charge of Rs 281 crore and a penalty of Rs 29 crore. The notice pertains to issues surrounding the wrong availment and short reversal of Input Tax Credit (ITC), as well as interest on late payments.

The tax authorities in Maharashtra have specifically cited discrepancies in LIC's GST payments, leading to this significant demand. However, LIC has clarified that the demand order is appealable and that the corporation plans to challenge the order before the Joint Commissioner of State Tax (Appeals) in Mumbai.

Despite the hefty sum involved, LIC assured that there would be no material impact on its financials, operations, or other business activities. The insurance giant remains confident in its position and is preparing to address the tax authority's concerns through the appropriate legal channels.

This development highlights the ongoing scrutiny of large corporations by tax authorities, especially in matters related to GST compliance. LIC's case also underscores the complexities involved in managing tax liabilities for large-scale businesses operating across multiple states with varying regulations.