Shares of Life Insurance Corporation of India (LIC), country’s largest life insurer, surged 1.8% to ₹841.75 apiece on BSE today, despite the company receiving over ₹100 crore tax notice from the Telangana state.
On January 2, LIC said the tax authorities of Warangal, Telangana, issued a demand order for interest and penalty amounting to around ₹116 crore, citing a demand of interest and penalty levied for FY18.
“The corporation has received communication/ demand order for Interest and penalty for Telangana state,” the company said in an exchange filing.
The insurance company stated its intention to file an appeal before the Joint Commissioner (ST), Hyderabad Rural Division, within the stipulated timelines in response to the mentioned order. The corporation emphasised that there is no material impact on its financials, operations, or other activities.
The current tax demand follows a series of similar notices received by LIC earlier. On Monday, Maharashtra tax authorities demanded ₹806 crore for the collection of GST, along with interest and penalty, for the fiscal year 2017-18.
“The corporation has received a communication/ demand order for collection of GST along with interest and penalty for Maharashtra state,” the filing said. Out of the total tax demand, ₹365 crore is in the form of GST, along with a penalty of around ₹404 crore and interest of around ₹36.5 crore.
The details of the violation in the filing states, “Non-Reversal of Input Tax Credit u/r 42 & 43 of CGST Rules,2017; Reversal of ITC Availed from Reinsurance; Interest on delayed payment made with GSTR-3B; Interest on Advance (Proposal Deposit) Received; Less RCM liability disclosed in GSTR-9/3B than shown by suppliers in GSTR-1.”
The company stated its intent to file an appeal before the commissioner (appeals), Mumbai and said there was no material impact on its financials, operations, or other activities of the corporation.
“Corporation shall file an appeal before Commissioner (Appeals), Mumbai against the said order within the prescribed timelines. There is no material impact on financials, operations or other activities of the Corporation,” the company says.
In December, the insurance company received a Goods and Service Tax (GST) notice amounting to around ₹183 crore from the Telangana branch of the taxation authority. This sum includes outstanding payments, penalties, and accrued interest.
The company says the demand order coupled with a penalty notice is related to the FY 2017-18.
The company is accused of claiming ‘excess input tax credit claimed under reverse charge mechanism’ and ‘short payment under reverse charge mechanism’.
