“Maharashtra Issues ₹806 Crore GST Notice to LIC, Potential ₹400 Cr Penalty”
India’s leading Life Insurance Corporation (LIC) finds itself in the crosshairs of taxation authorities as it grapples with a substantial Goods and Services Tax (GST) notice from the Maharashtra tax department, among other states, amounting to a staggering ₹806 crore. The notice, a culmination of tax dues, penalties, and interest, poses a significant financial challenge for the insurance giant.
India’s leading Life Insurance Corporation (LIC) finds itself in the crosshairs of taxation authorities as it grapples with a substantial Goods and Services Tax (GST) notice from the Maharashtra tax department, among other states, amounting to a staggering ₹806 crore. The notice, a culmination of tax dues, penalties, and interest, poses a significant financial challenge for the insurance giant.
The Maharashtra deputy commissioner of state tax has slapped LIC with a penalty of ₹404 crore, citing deficiencies in tax-related compliances during the financial year 2017-2018. The notice specifies demands for ₹365.02 crore in GST dues, coupled with the hefty penalty, and an additional interest payment of ₹36.5 crore, shedding light on alleged shortcomings in adhering to state department regulations.
According to the notice, LIC stands accused of failing to adhere to various state regulations, including the non-reversal of input tax credit as per CGST rules 37 and 38. GST officials have also highlighted discrepancies in the company’s treatment of input tax credit availed from reinsurance, pointing to purported lapses in compliance.
Furthermore, the insurance behemoth is under scrutiny for purportedly disclosing less liability under the reverse charge mechanism (RCM) than indicated by its suppliers, further compounding the tax authorities’ claims, as reported by Moneycontrol.
In response to the notice, LIC is gearing up to challenge the order in Maharashtra before the commissioner, aiming to contest the substantial penalty and dues. The company emphasized, via a filing, that the GST notice will have no bearing on its day-to-day operations or activities.
This isn’t an isolated incident for LIC, as it faces similar GST notices from various states across the nation. Earlier this year, the Bihar government issued a notice amounting to ₹290 crore, including a penalty of ₹16.67 crore. Moreover, the insurance giant disclosed receiving communication from Jammu and Kashmir authorities, indicating demands for GST, interest, and penalties.
The state of Telangana joined the fray, issuing a notice worth ₹183 crore, inclusive of interest and penalties, further adding to the mounting challenges for LIC in reconciling various state tax demands.
These successive notices from different state governments add complexity to LIC’s financial and compliance landscape, necessitating a proactive approach from the insurance giant to address and resolve these issues.
Sources By Agencies
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