Life Insurance Corporation of India Ltd. has been hit with penalties totalling Rs 230 crore from the Goods and Services Tax authorities in Telangana and Tamil Nadu, according to exchange filings on Friday.
These penalties come in addition to two similar tax demands received by LIC over the past month, bringing increased regulatory scrutiny on the state-owned insurer.
As per LIC's disclosure under Regulation 30 of the Listing Regulations, the Telangana State GST authority issued a demand notice for the financial year 2020-21, levying Rs 1.49 crore in GST, Rs 98.79 crore in interest, and Rs 13.44 crore in penalties. The total amount stands at approximately Rs 113.72 crore. The demand follows a supplementary order related to earlier violations under the Integrated GST Act.
The Tamil Nadu State GST authority issued a similar demand for the same fiscal year, seeking Rs 1.04 crore in GST, Rs 45.53 lakh in interest, and Rs 11.03 crore in penalties. This totals Rs 116.58 crore, and LIC plans to appeal the decision before the Commissioner (Appeals) in Chennai.
These recent penalties follow other tax notices issued to LIC in recent weeks. On Sept. 2, the company disclosed it had received penalties from the GST authorities in Jammu & Kashmir, Assam, Uttarakhand, and Andhra Pradesh, totalling Rs 75.40 crore. Additionally, on Aug. 29, LIC was slapped with a GST demand and penalty worth Rs 606 crore by the Mumbai tax authority.
Despite the series of tax demands, LIC maintains that these penalties have no material impact on its financials, operations, or other activities.
Additionally, on Aug. 30, the insurer informed exchanges that it had reduced its stakes in two major companies. LIC decreased its shareholding in DCM Sriram Ltd. from 8.579% to 6.431% and in HDFC Asset Management Company from 4.909% to 2.883%.
Shares of the company closed 2.74% lower at Rs 1,038.90 per share, compared to a 1.17% decline in the NSE Nifty 50.
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