LIC Shares In Focus On Receiving Rs 663 Cr GST Demand Notice From Chennai Tax Officials

The share price of Life Insurance Corporation of India (LIC) has been in focus recently after the insurance giant informed on Wednesday (Jan 3) that it has received orders from GST authorities for the collection of GST, Interest, and penalty for Tamil Nadu, Uttarakhand, and Gujarat states.

In an exchange filing, LIC said that the Corporation will file an appeal before the Commissioner (Appeals), Chennai, Commissioner (Appeals), Dehradun, and Commissioner (Appeals), Ahmedabad respectively against the said orders within the prescribed timelines.

According to the public sector insurer, the abovementioned orders will not have any material impact on the financials, operations, or other activities of the Corporation.

On Thursday, LIC shares were spotted trading 0.08% lower at Rs 838 per share at 1:59 pm IST. The share price of LIC Ltd traded at new 52 Week High value of 863.00 on January 1, 2024.

Earlier, in a regulatory filing, the company said that the corporation received a communication/demand order for interest and penalty from the Office of the Commissioner of CGST & Central Excise, Chennai North Commissionerate on January 1.

Later, on Tuesday, the life insurer received a demand order for interest and penalty of nearly Rs 116 crore for Telangana state for short payment of GST for 2017-18.

The demand for Telangana came one day after LIC on January 1 received a similar notice demanding about Rs 806 crore for short payment of GST for 2017-18 along with interest and penalty for Maharashtra.

LIC share price performance:

LIC shares have gained 33.96% in the last six months. In the last three months, the stock has advanced 31.53%. The last one year returns from LIC shares have increased 14.72%. In the last one month, the stock has gained 16.56%.

Recently, almost a dozen big companies including Hindustan Unilever (HUL), Zomato Eicher Motors, Asian Paints, Nestle India, and ICICI Pru have received tax demand notices for the GST payment. The notices have been seen for the recovery of tax liabilities, or erroneous claim of input tax credit, for FY2018-19 and FY2019-20. One reason why so many companies got notices in December 2023 was a looming deadline. For the fiscal 2018-19, the deadline has been extended from December 31, 2023, to March 31, 2024.

According to experts another reason behind a sudden surge in notices is that if the notices are not sent now they could be time-barred later. Besides, a flood of GST notices can also be attributed to technology. With the help of technology, thousands of time-sensitive notices are sent to concerned companies at the click of a button.