LIC Faces ₹230 Crore GST Penalties from Tamil Nadu and Telangana Authorities

On September 7, 2024, Life Insurance Corporation of India Ltd. (LIC) disclosed receiving substantial GST penalties totaling ₹230 crore from authorities in Telangana and Tamil Nadu. This development adds to a series of tax demands faced by the state-owned insurer in recent weeks.

According to LIC’s regulatory filing, the Telangana State GST authority issued a demand notice for the financial year 2020-21. This includes ₹1.49 crore in GST, ₹98.79 crore in interest, and ₹13.44 crore in penalties, totaling approximately ₹113.72 crore. This penalty follows a supplementary order related to previous violations under the Integrated GST Act.

In Tamil Nadu, the State GST authority has issued a similar demand for the same fiscal year. The demand includes ₹1.04 crore in GST, ₹45.53 lakh in interest, and ₹11.03 crore in penalties, amounting to ₹116.58 crore. LIC plans to appeal this decision before the Commissioner (Appeals) in Chennai.

These recent penalties are in addition to earlier tax notices received by LIC. On September 2, LIC revealed penalties totaling ₹75.40 crore from GST authorities in Jammu & Kashmir, Assam, Uttarakhand, and Andhra Pradesh. Additionally, on August 29, the company faced a GST demand and penalty worth ₹606 crore from the Mumbai tax authority.

Despite the mounting penalties, LIC has stated that these issues have no material impact on its financial performance, operations, or overall activities. The insurer also reported on August 30 a reduction in its stakes in two major companies: DCM Sriram Ltd., from 8.579% to 6.431%, and HDFC Asset Management Company, from 4.909% to 2.883%.

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