India is currently investigating a major tax evasion case involving the UK-based insurance company Aviva, which has been accused of being part of a large-scale conspiracy to evade taxes. Here’s what we know so far:
Between 2017 and 2023, Aviva’s Indian branch reportedly paid around $26 million to different vendors, supposedly for marketing and training services. However, authorities are now saying these payments were fake. The vendors, it seems, didn’t actually provide any services at all. Instead, they acted as middlemen to secretly funnel money to Aviva’s insurance agents.
This tricky scheme helped Aviva illegally avoid paying around $5.2 million in taxes, according to a notice sent by India’s Directorate General of GST Intelligence (DGGI), the agency responsible for investigating tax violations. To make things even worse, senior officials at Aviva were allegedly aware of this scheme all along. Despite this, Aviva has so far refused to make any public comments on the investigation, calling it “speculation.”
This case is part of a much larger investigation that started in 2022, involving more than a dozen insurance companies operating in India. Altogether, the total tax evasion in this industry could be as much as $610 million, including unpaid taxes, interest, and penalties.
But what exactly are these companies doing? According to Indian investigators, many insurance companies have been inflating their sales commissions—essentially paying their agents more than allowed by the rules—by disguising these extra costs as “advertising and marketing” expenses. By doing this, they’ve been able to claim tax credits they didn’t deserve. Some major Indian insurance companies, like Bajaj Allianz Life Insurance and ICICI Prudential Life Insurance, have also been caught up in this scheme and were issued warnings by tax authorities last year.
This investigation is now making waves in the financial world as authorities work to uncover the full extent of the fraud. The fact that a major global company like Aviva is involved only adds to the intrigue, as many are waiting to see how the case will unfold and whether further allegations will emerge.
At the same time, Aviva, which is the largest general insurer in the UK and a big player in Canada, announced plans earlier this year to expand its business in India. But with this tax scandal casting a shadow over the company, its future in the Indian market may now be uncertain.
