Tax inspectors in India conducted a search operation at the office of Aviva's life insurance unit located near New Delhi, which resulted in the seizure of various documents as part of an ongoing investigation into suspected tax evasion.

Officers from the Directorate General of GST (Goods and Services Tax) Intelligence were also involved in the operation, which occurred on Nov. 7. During the search, laptops were seized, and several officials, including India CEO Asit Rath and Chief Financial Officer Sonali Athalye, were questioned. This information was provided by sources who requested anonymity due to the sensitive nature of the matter.

Aviva Life Insurance, India, confirmed in a Reuters report the visit by GST officials to their headquarters, stating they are fully cooperating with the authorities. The company, however, did not offer further details and refrained from commenting on the interrogation of its executives.

This search at Aviva is part of a larger probe targeting multiple insurance firms, who are accused of evading taxes totalling at least US$610 million. According to one of the sources, a senior Indian government official, the allegations involve companies categorising sales commissions as advertising and marketing expenses, exceeding regulator-set limits, and subsequently claiming unlawful tax credits.

In a related context, India's largest insurer, the state-run Life Insurance Corporation, received a demand notice in September from GST authorities for 2.9 billion rupees (approximately US$35 million), as revealed in a regulatory disclosure. Other insurance companies, such as HDFC Life and Bajaj Allianz, are also under scrutiny as part of this investigation.

Elsewhere in the country, the Indian insurance sector is preparing for a significant overhaul with the Insurance Regulatory and Development Authority of India (IRDAI) preparing the groundwork for enhanced pricing freedom for general insurers.

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