The Life Insurance Corporation of India (LIC) has received a demand notice of Rs 479.88 crore from the Maharashtra tax authorities for alleged short payment of Goods and Services Tax (GST) for the financial year 2020-21. The Deputy Commissioner of State Tax, Mumbai, issued the notice on 27 February, LIC stated in a regulatory filing on Thursday.
The notice cites wrong availment and short reversal of Input Tax Credit (ITC), interest on late payments, and short payment of tax liability as reasons for the demand. The total amount includes Rs 242.23 crore in GST, Rs 213.43 crore in interest, and Rs 24.22 crore in penalties.
LIC has the option to appeal the order before the Joint Commissioner of State Tax (Appeals), Mumbai. The company has not yet disclosed whether it intends to challenge the demand. If appealed, the case may undergo further scrutiny, potentially leading to a reduction or modification of the tax liability.
LIC clarified that despite the significant financial demand, the notice would not materially impact its financials, operations, or other business activities. The insurer continues to function as usual and has not announced any immediate measures to address the demand.
This case reflects increased scrutiny of corporate tax compliance, with authorities closely monitoring large corporations for discrepancies. As India’s largest insurer, LIC plays a key role in the financial sector and remains under regulatory and investor observation.
The company has not confirmed if it has received similar tax demands in other states. However, tax assessments and compliance checks remain a routine part of regulatory oversight for large corporations. LIC is expected to evaluate its legal options before deciding its course of action.
With frequent tax scrutiny on businesses, ensuring proper compliance is crucial.
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