LIC of India has received a substantial tax demand notice from Maharashtra State tax authorities, with the total demand amounting to ₹2,370.28 crores. The notice was received on December 10, 2025, at 10:18 hours from the Deputy Commissioner of State Tax, Chembur, Mumbai.

Details of the Tax Demand

The demand notice covers the financial years 2021-22 to 2023-24 and comprises three main components. The breakdown of the total demand is presented below:

Nature of Alleged Violation

The tax authorities have alleged that LIC claimed excess Input Tax Credit (ITC) during the specified period. This forms the basis for the GST demand, along with the associated interest and penalty components. The Deputy Commissioner of State Tax, Chembur, Mumbai, issued the demand order under the Goods and Services Tax regulations.

Company's Response and Impact Assessment

LIC has disclosed that the financial impact of the demand is limited to the extent of the GST, interest, and penalty amounts specified in the notice. The company has clarified that there is no material impact on its operations or other activities despite the substantial monetary demand.

The insurance corporation has indicated its intention to challenge the order through the available legal remedies. The demand order is appealable before the Commissioner (Appeals), Mumbai, and LIC is expected to pursue this appellate route.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. LIC has informed both the BSE Limited and National Stock Exchange of India about this development, ensuring transparency with its stakeholders and the investing public.

This development represents a significant regulatory challenge for India's largest life insurance company, though the company maintains that its core operations remain unaffected by this tax demand.

LIC Receives Significant GST Demand Order

LIC of India , the country's largest insurer, has disclosed that it received a Goods and Services Tax (GST) demand order amounting to ₹806.36 crore from the Mumbai West Commissionerate of the Central GST & Central Excise department. This development was revealed in a regulatory filing to the stock exchanges on April 8, 2023.

Details of the GST Demand

The GST demand order covers the following aspects:

• Period: April 2016 to March 2017
• Principal Amount: ₹365.02 crore
• Interest: ₹441.34 crore
• Total Demand: ₹806.36 crore

LIC's Response and Next Steps

LIC has stated that it will be filing an appeal against this order before the appropriate authority. The insurance giant believes it has a strong case and is confident in contesting the demand successfully.

Potential Impact on LIC

While the GST demand is substantial, it's important to consider the following points:

1. Financial Strength: Given LIC's size and financial robustness, the demand amount, while significant, is unlikely to cause major financial stress to the company.

2. Appeal Process: The appeal process provides LIC with an opportunity to present its case and potentially reduce or eliminate the demand.

3. Provisioning: LIC may need to make provisions for this demand in its financial statements, which could impact short-term profitability.

4. Investor Sentiment: The news might cause some short-term volatility in LIC's stock price as investors assess the potential impact.

Industry Implications

This GST demand on LIC could have broader implications for the insurance sector:

1. Regulatory Scrutiny: Other insurance companies might face increased scrutiny of their GST compliance.

2. Industry Practices: The specific issues raised in the demand order could lead to a review of industry-wide practices related to GST.

3. Compliance Costs: Insurance companies may need to allocate more resources to ensure strict GST compliance, potentially increasing operational costs.

Conclusion

While the GST demand of ₹806.36 crore is a significant development for LIC, it's crucial to remember that the company has the right to appeal and contest the order. Investors and industry observers should monitor the situation closely, particularly the progress of LIC's appeal and any potential impact on the company's financial statements in the coming quarters.

As always, it's advisable for investors to consider this development in the context of LIC's overall financial health, market position, and long-term growth prospects before making any investment decisions.