The Indian unit of British insurer Aviva has been ordered to pay $7.5 million in back taxes and penalties after an investigation found that the company engaged in fraudulent practices to evade taxes. The probe revealed that between 2017 and 2023, Aviva India paid around $26 million to vendors for marketing services, but the authorities discovered that these vendors were merely fronts to funnel illegal commissions to Aviva’s agents. The company used fake invoices and cash payments to claim tax credits and evade $5.2 million in taxes.
The investigation found that Aviva engaged in deliberate tax evasion, amounting to 326 million rupees ($3.8 million), and has been ordered to pay this amount together with a 100% penalty, resulting in a total of 653 million rupees ($7.5 million). The order described the vendors as “puppets” in Aviva’s scheme to claim bogus tax credits.
Aviva India has stated that it will contest the decision through an appeal and that the order will not impact its operations. The company operates in India as a joint venture with Dabur Invest Corp., which owns a 26% stake. However, Dabur has not commented on the issue. Despite the controversy, Aviva India’s business reported a profit after tax of only $10 million in the 2023-24 financial year, highlighting the financial performance of the company in the region.