Life Insurance Corporation of India ( LIC ) was recently dealt with a heavy blow by the Tamil Nadu and Telangana Goods and Service Tax ( GST ) Authorities in the form of Penalties to the tune of Rs.230 imposed on arrears on GST payable.
The Penalties were imposed on LIC subsequent to Exchange Filings submitted by the Insurer on Friday (6th August, 2024) under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( LODR ).
Regulation 30 of LODR requires listed entities to disclose material events or information related to their activities and/or conduct in the stock exchanges.
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Statement issued by LIC under Regulation 30 of LODR revealed that the Telangana State GST Authority had served LIC with a Demand Notice for the Financial Year 2020-2021, imposing a levy of Rs.1.49 Crore in unpaid GST, Rs.98.79 Crore in Accrued Interest and Rs.13.44 Crore in Penalties totaling Rs.113.72 Crore.
The Present Demand Notice comes subsequent to a supplementary order issued by the Telangana State GST Authority against LIC for prior violations of the Integrated GST Act, 2017.
Likewise, the Tamil Nadu State GST Authority also made tax demands against LIC for FY 2020-21 demanding an amount of Rs.1.04 Crore in unpaid GST, Rs.45.53 Crore as Accrued Interest and Rs.11.03 Crore in Penalties amounting to Rs.116.58 Crore.
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The present Demands come in addition to previous tax demands of a cumulative Rs.681.4 crore issued to LIC by the GST authorities in Jammu & Kashmir, Assam, Uttarakhand, Andhra Pradesh and Mumbai.
LIC vehemently opposed the present demands stating that the tax authorities have not adduced material evidence justifying the Tax Demands and intends to Appeal the Demands to the Jurisdictional Commissioner (Appeals).
Shortly before being hit with the Tax Demands on 6th August, 2024, LIC had informed the Stock Exchanges that they had reduced their shares in DCM Sriram Ltd. from 8.579% to 6.431%, and the stake in HDFC Asset Management Company from 4.909% to 2.883%.
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As a consequence of the occurrences, LIC faced a shortfall of Rs.2.74% in their share price closing in at Rs 1,038.90 per share.
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