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LIC received a ₹529.6 crore GST demand order for FY19-20 due to excess ITC availed and short reversal. The insurer has filed an appeal.
The Life Insurance Corporation of India (LIC) has filed an appeal with the GST Appellate Authority, Tamil Nadu, challenging a ₹529.6 crore Goods and Services Tax (GST) demand order. The order, issued by the Joint Commissioner of GST, Chennai, pertains to FY2019-20 and includes ₹104.9 crore in tax, ₹45.5 lakh in interest, and ₹11.03 crore in penalties. The demand arises from allegations of excess Input Tax Credit (ITC) claimed and insufficient reversal of ITC during the specified period.
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Total Demand: ₹529.6 crore (Tax: ₹104.9 crore, Interest: ₹45.5 lakh, Penalty: ₹11.03 crore).
Period: Financial Year 2019-20.
Reason: Excess ITC claimed and short ITC reversal.
Appeal: Filed before GST Appellate Authority, Tamil Nadu.
Financial Impact: Limited to the demand specifics, with no operational or material implications.
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While the ₹529.6 crore demand highlights compliance concerns, LIC has assured that its financials, operations, and other activities remain unaffected. The insurer's proactive approach to filing an appeal demonstrates its commitment to resolving the issue promptly.
Below is a summary of the demand breakdown:
Aspect | Amount (₹) |
Tax | 104.9 crore |
Interest | 45.53 lakh |
Penalty | 11.03 crore |
Total Demand | 529.6 crore |
The GST demand order may influence LIC share price in the short term, as investors evaluate the potential financial and compliance risks. However, LIC’s appeal and its assurance of no material impact on operations could stabilise market confidence.
As LIC challenges the GST order, the case underscores the importance of regulatory compliance and accurate ITC claims for large corporations. The resolution of this issue will likely reinforce LIC’s commitment to transparency and accountability.
The outcome of LIC’s appeal will determine the final impact of the ₹529.6 crore demand. For now, the insurer maintains steady operations while addressing regulatory concerns.
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