Aviva's Tax Controversy: Evading Regulations in India
Aviva Under Fire: Allegations of Tax Evasion in India
An Indian tax agency has discovered that UK-based insurer Aviva allegedly violated local regulations governing commissions to sales agents through a network of fake invoices and clandestine cash payments. In an effort to expand its operations, Aviva's India branch reportedly paid around $26 million from 2017 to 2023 to entities that purportedly offered marketing and training services, as indicated in a tax notice dated August 3.
According to the Directorate General of GST Intelligence, which monitors indirect tax compliance, these vendors did not fulfill any services and essentially functioned as fronts to funnel payments to Aviva’s agents. Investigators stated that Aviva officials have engaged in a conspiracy that involved using fraudulent invoices to transfer funds to its insurance distributors.
Details of the Investigation
The notice, previously confidential but now reported by Reuters, requires Aviva to justify why it should not face penalties for alleged violations. The ongoing investigation is part of a broader crackdown on Indian insurers under suspicion of evading about $610 million in unpaid taxes.
- Potential Penalties: Aviva could incur penalties approximating $11 million, matching its profits from life insurance sales in India for 2023.
- System of Over Ride Commissions: Payments exceeding regulatory limits were covertly categorized as
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.