In a recent development, the Life Insurance Corporation of India (LIC) has been slapped with a substantial Goods and Services Tax (GST) bill amounting to over Rs 290 crore by the Bihar State Tax Department. This bill encompasses not only the principal tax amount but also includes accrued interest and penalties.
According to an official exchange filing dated September 22, LIC has stated its intention to challenge this tax assessment by appealing before the GST Appellate Tribunal.
The breakdown of the tax liability is as follows:
- Principal Tax Amount: Rs 166.75 crore
- Accrued Interest: Rs 107.05 crore
- Penalties: Rs 16.67 crore
- Total Amount: Rs 2,90,49,22,609
LIC received this tax demand following an order issued under Section-73(9) of the BGST and CGST Act 2017. The order was issued by the Bihar Additional Commissioner State Tax (Appeal), Central Division, Patna, on September 21.
The order primarily cites two violations:
- Non-reversal of Input Tax Credit (ITC) availed and utilized on items that are not subject to GST, specifically related to the premium received by LIC from policyholders.
- Non-reversal of ITC related to the agents’ commission on items not leviable to GST, particularly pertaining to the premium and exempted policies.
In response to this development, LIC has affirmed its commitment to following the prescribed legal procedures and will promptly file an appeal before the GST Appellate Tribunal to contest the tax demand and associated charges.
About LIC:
The Life Insurance Corporation of India (LIC), headquartered in Mumbai, is a prominent Indian multinational public sector life insurance firm. It holds the distinction of being India’s largest insurance company and the foremost institutional investor, boasting a substantial ₹45.7 trillion in total assets under management as of March 2023.
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