UK insurer Aviva conspired to dodge India compensation & tax rules: DGGI
An Indian tax agency has found that British insurer Aviva breached local regulations capping commissions to sales agents with a system of fake invoices and clandestine cash payments, according to a notice seen by Reuters.
In an attempt to grow operations, Aviva’s India business paid about $26 million between 2017 and 2023 to entities who purportedly provided marketing and training services, according to the tax notice sent to Aviva, dated Aug. 3.
But the vendors, who did not perform any work, were actually a front for channeling funds to Aviva’s agents, said the Directorate General of GST Intelligence (DGGI), which is responsible for policing violations of indirect taxes.
Aviva and its officials have indulged in a deep-rooted conspiracy and used the modus of fake invoices (without receipt of services) to pass on certain money to insurance distributors of Aviva,” investigators wrote in the notice.
Details of the notice, which is not public, are reported by Reuters for the first time. Such “show cause” notices typically require companies to explain why authorities should not issue penalties for their alleged acts.
The case is part of broader investigation into over a dozen Indian insurers for alleged evasion of $610 million in unpaid taxes, interest and penalties. The roughly $26 million in fake invoices were used by Aviva incorrectly to claim tax credits and evade $5.2 million in taxes, the notice alleged. Read More – Top car insurance companies for September 2024
