Life Insurance Corporation of India ( lic of india ) received a GST demand order on July 30, 2026, totaling approximately ₹10.9 crore in tax and penalties for the fiscal year 2022-23. The Additional Commissioner Central GST & Central Excise, Jamshedpur, issued the communication alleging pre-mature availment of Input Tax Credit (ITC) under the Reverse Charge Mechanism (RCM). The order requires the insurer to pay GST of ₹99,09,87,896 and a penalty of ₹9,90,98,790, along with applicable interest. This regulatory action stems from compliance scrutiny regarding input tax credit claims made during FY22-23, potentially affecting cash flows if not contested successfully.

The filing, disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details the specific nature of the contravention. The tax authority identified discrepancies in the timing of ITC availment on RCM supplies. While the exact calculation methodology for the interest component was not specified beyond "as applicable," the principal tax and penalty figures are fixed by the order. The matter is appealable before the Commissioner (Appeals), Jamshedpur, providing the Corporation with a statutory avenue to challenge the findings.

Key Details of the Demand Order

Management has assessed the potential ramifications of this order on the company's balance sheet and operational continuity. In its disclosure to the stock exchanges, Life Insurance Corporation of India stated that the financial impact is limited to the extent of the demanded GST, interest, and penalty amounts. The Corporation emphasized that there is no material impact on its overall financials, operations, or other activities. This assertion suggests that the liability, while significant in absolute terms, remains immaterial relative to the insurer's large asset base and revenue streams.

What the Numbers Show

The allegation centers on the Reverse Charge Mechanism, where the recipient of services is liable to pay GST rather than the supplier. Pre-mature availment of ITC implies that LIC claimed credits before the legal due date or without fulfilling specific conditions, leading to a disallowance and subsequent penalty. The penalty amount is exactly 10% of the GST demand (₹9,90,98,790 is 10% of ₹99,09,87,896), indicating a standard statutory penalty rate for such procedural non-compliances rather than a punitive measure for fraud. For an entity of LIC's scale, a ₹10.9 crore liability is operationally negligible, but it highlights ongoing compliance risks in complex tax structures like RCM. The ability to appeal provides a mechanism to recover these funds if the initial assessment is found erroneous.

Shri Mahalingam G and Dr. V. S. Parthasarathy cease to hold the position of independent directors at lic of india upon the completion of their terms on July 28, 2026. The departure of these two directors reshapes the composition of several key board committees, as both individuals held significant governance roles, including chairpersonships of critical oversight bodies such as the Audit Committee and the Nomination and Remuneration Committee.

The cessation of office is effective after the close of day on July 28, 2026. This disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with circulars issued thereunder. The company informed the Listing Departments of BSE Limited and National Stock Exchange of India Ltd. of the change in directorship, ensuring regulatory compliance and market transparency.

Consequent to their departure from the Board, both directors cease to be chairpersons or members of the respective committees they served. Shri Mahalingam G was the chairperson of the Nomination and Remuneration Committee, Risk Management Committee, and Stakeholders Relationship Committee. Dr. V. S. Parthasarathy chaired the Audit Committee, Policyholder Protection, Grievance Redressal and Claims Monitoring Committee, and Environment, Social & Governance Committee.

Committee Exits

The following table details the committees from which the directors are exiting:

Regulatory Disclosures

The company provided specific disclosures for each director under Para A of Schedule III to the Listing Regulations. For Shri Mahalingam G (DIN: 09660723), the reason for change is cited as the cessation upon completion of term. Similarly, for Dr. V. S. Parthasarathy (DIN: 00125299), the reason is stated as cessation upon completion of term. Neither director is debarred from holding the position of director pursuant to any SEBI order or other authority.

The intimation has been placed on record with the stock exchanges and is available on the corporation’s website at www.licindia.in . Anshul Kumar Singh, Company Secretary & Compliance Officer, signed the disclosure dated July 28, 2026.