 "Aviva’s India Unit Under Fire for Alleged Million Tax Evasion Scheme")
British insurer Aviva is under scrutiny in India for alleged tax evasion involving fake invoices and cash payments to sales agents. Reports indicate that between 2017 and 2023, Aviva’s India unit breached local commission regulations, which led to an estimated $5.2 million in unpaid taxes. The Indian tax agency claims that Aviva channeled about $26 million to entities that provided no actual services. Facing penalties up to $11 million, Aviva stated that it is “actively engaging” with authorities to address the issue, which it claims is an “industry-wide” concern. The company holds a 74 percent stake in its Indian joint venture with Dabur Invest Corp, as part of a larger investigation into numerous Indian insurers for tax-related violations.
Aviva, the British insurance giant, is currently under scrutiny in India regarding alleged tax evasion practices. The company confirmed this situation on Saturday, stating that its local unit is actively working with authorities to resolve the issue. According to a report by Reuters, the Indian tax agency has discovered that Aviva India allegedly circumvented regulations that limit commissions to sales agents. This was purportedly done through fake invoices and secret cash transactions from 2017 to 2023.
The inquiry reveals that Aviva’s India branch made payments of around $26 million to various entities that allegedly provided Marketing and training services. However, these entities reportedly did not perform any actual work, serving merely as a front to transfer funds to Aviva’s agents. The irregularities have led to claims that Aviva used these fake invoices to claim tax credits, facilitating an evasion of $5.2 million in taxes. The company could face fines amounting to $11 million, nearly equal to its profit from life insurance sales in India for the year 2023.
In response to these allegations, a spokesperson for Aviva characterized the matter as an “industry-wide issue” and assured that their Indian joint venture is cooperating fully with local authorities. Aviva holds a 74 percent stake in this joint venture with Dabur Invest Corp., a well-known local firm.
This investigation into Aviva is part of a larger crackdown affecting over a dozen insurance providers in India, who are suspected of evading a staggering $610 million in unpaid taxes, interests, and penalties. Aviva has maintained that it is facing a “small potential tax claim,” and emphasizes that no adverse ruling or penalty has yet been issued against the company.
In summary, the allegations against Aviva highlight serious compliance issues in the Indian insurance sector, prompting increased scrutiny from tax authorities. As the investigation unfolds, it remains to be seen how this will impact Aviva’s operations in India moving forward.
Tags: Aviva, tax evasion, India, Dabur Invest Corp, insurance, compliance, financial regulation, business news.
What is Aviva’s role in India regarding taxes?
Aviva is a British insurance company that operates in India and actively engages with tax authorities to ensure compliance with local tax laws.
Why does Aviva engage with tax authorities in India?
Aviva engages with tax authorities to maintain transparency, stay compliant with regulations, and build a positive relationship with the government.
How does Aviva ensure it pays the right amount of tax in India?
Aviva uses expert teams to follow tax laws carefully, keeping accurate records and seeking regular advice from tax professionals.
What types of taxes does Aviva pay in India?
Aviva pays various taxes, including income tax, GST on services, and other applicable insurance-related taxes.
Can customers see how Aviva’s tax practices benefit them?
Yes, Aviva’s responsible tax practices support the local economy, which can lead to better services and products for customers.
