Life Insurance Corporation of India (LIC) announced that it has received a notification regarding payment of Goods and Services Tax (GST). Including interest and penalty, the notice stated the amount of Rs. 806 crore. LIC plans to challenge this decision and will file an appeal. The notice was received on January 1.
According to LIC, they have received a demand order accompanied by a penalty notice for GST for the financial year 2017-18. The amount requested is Rs 365,02,67,702 for GST, Rs. 404,77,06,418 as a penalty, and Rs. 36,50,35,206 of interest it accumulated, totalling over Rs 806 crore.
LIC stated that the corporation will file an appeal against the order within the specified time frame by approaching the Commissioner (Appeals) in Mumbai to respond to the GST demand of Rs. 806 crore for Maharashtra state. They maintain that this demand for GST will have a minimal impact on their financials and operations.
LIC explained that the notice was issued on the grounds of breaching the following norms: Failure to reverse Input Tax Credit as per rules 42 & 43 of CGST Rules, 2017; Reversal of ITC received from reinsurance; Interest on delayed payment submitted with GSTR-3B; Interest on advances (proposal deposits) received; Less Reverse Charge Mechanism (RCM) liability declared in GSTR-9/3B compared to what suppliers reported in GSTR-1.
In a separate case, Zomato also received a notice from the Directorate General of GST Intelligence. The notice questioned why a tax liability of Rs 401.70 crore, along with interest and penalty, should not be demanded from the company for the period between October 29, 2019, and March 31, 2022. The tax accountability was based on the delivery charges Zomato took from its customers.
However, Zomato firmly believes that it is not accountable for paying any tax, as the delivery charge is collected by the firm on behalf of the delivery partners.
Similarly, Swiggy, a rival food aggregator company, is reported to have received a similar GST notice for a tax amount of approximately Rs. 350 crore.
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