Mumbai/Jamshedpur : Life Insurance Corporation of India (LIC), the country’s largest state-owned life insurer, has received a Goods and Services Tax (GST) demand notice amounting to approximately ₹109 crore, including penalty, from the Additional Commissioner, Central GST & Central Excise, Jamshedpur, for the Financial Year 2022–23.
The development was disclosed by LIC in a regulatory filing submitted to the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Break-Up of the Tax Demand
According to the regulatory filing, the tax authorities have raised the following demand:
- GST Demand: ₹99.09 crore
- Penalty: ₹9.90 crore
- Interest: Payable as per applicable provisions under the GST Act
The total financial implication of the order is approximately ₹109 crore, excluding the applicable statutory interest.
Reason Behind the GST Notice
The demand arises from the alleged premature availment of Input Tax Credit (ITC) under the Reverse Charge Mechanism (RCM) during FY 2022–23.
As per the Goods and Services Tax (GST) framework, taxpayers are required to first discharge their Reverse Charge Mechanism (RCM) liability before claiming the corresponding Input Tax Credit (ITC).
According to the tax authorities, LIC claimed the input tax credit before settling the applicable reverse charge tax liability, which has been treated as a violation of GST compliance provisions.
LIC Says Business Operations Remain Unaffected
In its filing to the stock exchanges, LIC clarified that the tax order would not have any material impact on its core business operations or financial stability.
The company stated that:
- The financial impact is restricted to the tax demand, applicable interest, and penalty mentioned in the order.
- The notice does not affect LIC’s operational performance, business activities, or solvency position.
- The insurer continues to operate normally without any disruption to its services or policyholder obligations.
LIC to Challenge the Order
LIC has also informed investors that the order is appealable under the provisions of the GST law.
The company stated that it intends to exercise its legal rights and may file an appeal before the Commissioner (Appeals), Jamshedpur, seeking appropriate relief against the demand.
The final financial liability, therefore, will depend on the outcome of the appellate proceedings.
Regulatory Disclosure
The company received the tax order on July 30, 2026, and subsequently informed the stock exchanges on July 31, 2026, in compliance with the disclosure requirements prescribed under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations.
The regulatory filing was signed by Mr. Anshul Kumar Singh, Company Secretary and Compliance Officer of Life Insurance Corporation of India.
Key Highlights
- Life Insurance Corporation of India (LIC) has received a GST demand notice of approximately ₹109 crore, including penalty.
- The notice has been issued by the Additional Commissioner, Central GST & Central Excise, Jamshedpur.
- The order relates to the Financial Year 2022–23.
- GST Demand: ₹99.09 crore.
- Penalty: ₹9.90 crore.
- Interest will be payable as per the applicable provisions of the GST Act.
- The notice pertains to the alleged premature availment of Input Tax Credit (ITC) under the Reverse Charge Mechanism (RCM).
- LIC has stated that the order will not materially impact its operations, business performance, or solvency.
- The company has the legal option to appeal the order before the Commissioner (Appeals), Jamshedpur.
The latest GST demand represents a regulatory compliance matter for LIC rather than an operational challenge. While the company faces a substantial tax demand and penalty, it has emphasized that its financial strength and day-to-day operations remain unaffected. As the matter is subject to the appellate process, the final outcome will depend on the legal proceedings under the GST framework.
