The Life Insurance Corporation of India (LIC) recently found itself confronted with a Goods and Services Tax (GST) demand totalling over Rs 290 crore in Bihar. This amount encompasses the tax demand itself, which stands at more than Rs 166.75 crore, accompanied by interest and penalties, amounting to Rs 107.05 crore and Rs 16.67 crore, respectively.
LIC's Response and Upcoming Appeal
LIC promptly responded by stating its intention to file an appeal before the GST Appellate Tribunal, as indicated in an exchange filing dated September 22. The demand, interest, and penalty arose from an order received under Section-73(9) of the BGST and CGST Act 2017, issued by the Bihar Additional Commissioner State Tax (Appeal), Central Division, Patna, on September 21.
Reasons Behind the Demand
The order highlights the violation related to the non-reversal of Input Tax Credit (ITC) availed and utilized on non-leviable GST items, specifically on the premium received from policyholders and agents' commission associated with non-leviable GST portions of the premium and exempted policies.
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