Life Insurance Corporation of India (LIC) shares were dropping on Tuesday after being served a goods and services tax (GST) notice of ₹806.3 crore by the Maharashtra deputy commissioner of state tax.
What Happened: The demand notice encompasses ₹365.02 crore in GST dues, ₹404.7 crore in penalties, and an interest payment of ₹36.5 crore. GST officials identified various violations, including the non-reversal of input tax credit in accordance with CGST rules, and the failure to reverse input tax credit obtained from reinsurance.
Additionally, LIC faced interest charges for delayed payment associated with GSTR-3B and interest on advance received. The insurer also disclosed a lesser reverse charge mechanism (RCM) liability than reported by its suppliers.
LIC said it intends to file an appeal before the commissioner against the order, underscoring in a regulatory filing that there will be no substantial impact on its financials, operations or other activities.
Why It Matters: This development follows multiple GST notices received by LIC from state authorities nationwide. Previously, LIC had faced a GST receipt, including interest and penalty, of over ₹290 crore from Bihar state tax officials. The insurer also encountered a GST penalty of ₹36,844 for lower payment of taxes in October 2023. In December 2023, LIC received a GST notice from the Telangana taxation authority for ₹183 crore, covering pending dues, penalties and interest.
Get all the latest Share Market trends and news to set you up for the week ahead.
Price Action: LIC’s share price was down 1.59% at ₹845.10 in the morning session of trade on Tuesday. The stock is now only around 6.5% off its IPO price of ₹949.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.