GST Dept Investigates Aviva Life Insurance Office For Alleged Tax Evasion: Sources

Tax inspectors in India conducted a search operation last week at the office of the British insurance giant Aviva's life insurance unit near New Delhi, seizing documents as part of an investigation into alleged tax evasion, according to sources familiar with the matter.

Officials from India's Directorate General of GST (Goods and Services Tax) Intelligence also confiscated laptops during their visit on 7 November 2023 and interviewed some officials, including the India CEO Asit Rath and Chief Financial Officer Sonali Athalye, as disclosed by two anonymous sources due to the sensitivity of the matter.

Aviva Life Insurance, India, confirmed the visit by GST officials to its head office site, stating they are in full cooperation but provided no further details and refrained from commenting on its executives being questioned.

The Finance Ministry of India, overseeing the GST department, has not immediately responded to an email request for comment.

The Aviva searches are part of a wider investigation involving numerous insurers facing allegations of unpaid dues totalling at least USD 610 million, according to a senior Indian government official. Companies are accused of recording sales commissions above the regulator-prescribed limit as advertising and marketing costs and then illegally claiming tax credits, the source added.

In September, India's largest insurer, state-run Life Insurance Corporation, received a 2.9 billion-rupee (USD 35 million) demand notice from GST authorities as part of the investigation. Other players such as HDFC Life and Bajaj Allianz have also come under scrutiny, with the insurers refraining from commenting on the investigations.

The specific amount that Aviva allegedly evaded in taxes is not immediately clear. Aviva in the UK holds a 74 per cent stake in Aviva Life Insurance in India, with the remaining owned by India's Dabur Invest Corp. Aviva's life insurance business maintains a less than 0.5 per cent market share based on first-year premium collections in India.