Aviva’s India Arm Hit With $7.5 Million Fine for Fake Invoice Scheme, Order Shows
Article 0 Comments Indian authorities have ordered British insurer Aviva’s local unit to pay $7.5 million in back taxes and penalties after an investigation found it created fake invoices to pay illegal commissions and claimed incorrect tax credits, an order shows. The tax demand is significant for Aviva’s India business, which recorded a profit after tax of only $10 million in the 2023-24 financial year. Aviva also faces stiff competition from rivals in India’s insurance market. To grow its business, Aviva India paid about $26 million between 2017 and 2023 to vendors who purportedly provided marketing services, but they were only a front to give Aviva’s agents excess commissions beyond regulatory limits, Indian tax authorities alleged in an August 3 notice Reuters reported last year. Using the clandestine system of fake invoices and cash payments, Aviva incorrectly claimed tax credits and evaded $5.2 million in taxes, authorities had alleged. After hearing Aviva’s defense, joint tax commissioner Aditya Singh Yadav ruled the company evaded tax of around 326 million rupees ($3.8 million), which it must pay with a 100% penalty, totalling 653 million rupees, or $7.5 million, according to a February 5 order reviewed by Reuters that has not been made...