The Life Insurance Corporation of India (LIC) has received a Goods and Services Tax (GST) demand, which includes interest and penalty, from Bihar state tax officials amounting to over Rs 290 crore. This development was disclosed in an exchange filing dated September 22.
Here is a breakdown of the GST demand
- Tax Demand: The tax demand itself is for over Rs 166.75 crore.
- Interest: An interest amounting to over Rs 107.05 crore has been imposed.
- Penalty: A penalty of Rs 16.67 crore has been levied.
The total sum of these components amounts to Rs 2,90,49,22,609.
LIC stated in the exchange filing that they received an order under Section-73(9) of the Bihar Goods and Services Tax (BGST) and Central Goods and Services Tax (CGST) Act 2017 from the Bihar Additional Commissioner State Tax (Appeal), Central Division, Patna on September 21. This order demanded GST payment along with interest and penalty.
The filing further mentioned that the corporation intends to file an appeal before the GST Appellate Tribunal in response to this order within the prescribed timelines.
The order cited the violation as the "non-reversal of the Input Tax Credit (ITC) availed and utilized on the item non-leviable to GST on the portion of the premium received by the corporation from the policyholder and the non-reversal of the ITC of the portion of the agents’ commission on the item non-leviable to GST on the portion of the premium and the exempted policies." This appears to be the basis for the GST demand, interest, and penalty imposed on LIC by the tax authorities in Bihar.