• Notification Date: 13-01-2024
• Notification No: N/A

LIC gets Rs 1,370.60 crore Income tax Demand Notice from Mumbai Authorities

Life Insurance Corporation (LIC) on January 12 acknowledged the receipt of an order from the Income Tax authorities about a demand notice of Rs 1,370.60 crore issued by the Assistant Commissioner of Income Tax, Mumbai. The insurance corporation said that it would submit an appeal to the Commissioner (Appeals), Mumbai, within the specified timeframes 

The information regarding this development came to light on January 11, 2024, at 6:32 pm, LIC stated. 

"This is to inform that Life Insurance Corporation has received an order from Income Tax authorities regarding the Income Tax demand issued by the Assistant Commissioner of Income Tax, Mumbai. Corporation shall file an appeal the said order within the prescribed timelines. The information came to our knowledge on January 11, 2024, at 6:32 pm," LIC said in its stock exchanges filing. 

The income tax demand notice read that in the assessment year 2011-12, the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to scrutinise the factual details and utilisation of surplus, deciding compliance with the law regarding the issue of disallowance/addition related to interim bonus as stated in the assessment order. Upon reassessment, the assessing officer disallowed the interim bonus, leading to the issuance of a demand notice amounting to Rs 1,370.60 crore. 

The order has no significant impact on the Corporation's financials, operations, or other activities, LIC said. 

On January 12, LIC shares fell 1 percent in early trade as the state-owned insurer received two demand orders worth Rs 3,528.75 crore from the income tax authorities in Mumbai. Following the Income Tax Appellate Tribunal's directive to review LIC's use of surplus in connection to an interim bonus mentioned in the assessment order, the assessing officer disallowed the bonus, resulting in a tax effect of Rs 2,133.67 crore. Additionally, for the assessment year 2015-16, LIC faces a demand notice of Rs 1,395.08 crore, prompting the company to appeal before the Commissioner (Appeals), Mumbai. 

On January 3, LIC said tax authorities have slapped a demand notice of about Rs 116 crore on it for short payment of Goods and Services Tax (GST) for 2017-18. That very day, tax authorities slapped a demand notice of about Rs 663.45 crore on it for short payment of Goods and Services Tax (GST). The demand pertains to the wrong availment of Input Tax Credit (ITC) and non-payment of tax on turnover wrongly declared as non-GST supply in GSTR-1 for 2017-18, and 2018-19.  

On January 12, LIC received a GST notice of Rs 806.3 crore from the Maharashtra deputy commissioner of state tax for various compliance-related shortcomings in FY 2017-18. The demand notice includes Rs 365.02 crore of GST dues, Rs 404.7 crore of penalty, and an interest payment of Rs 36.5 crore. 

On December 11, 2023, LIC was served a GST notice worth Rs 183 crore from the Telangana arm of the taxation authority. In October, LIC was hit with a GST notice by the state taxes officer at Srinagar, imposing a fine of Rs 36,844 crore for lower payment of taxes.