HDFC Life gets Rs 942-crore GST demand notice

HDFC Life has received a Goods and Services Tax (GST) demand notice of Rs 942 crore for the period between July 2017 to March 2022.

HDFC Life Insurance announced on June 23 that it has received a demand notice of more than Rs 942 crore for non-payment of GST. Shares of HDFC Life Insurance were trading marginally up in the morning on June 26.

The matter relates to the claiming of input tax credit against supply of services, which the Directorate of Goods and Services Tax (GST) Intelligence (DGGI) believes are ineligible for such claims, it said.

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"HDFC Life Insurance Company has received a show cause cum demand notice from the Directorate General of GST Intelligence, Mumbai Zonal Unit asking the Company to show cause why a tax of Rs 942,18,46,028 pertaining to the period July 2017 to FY 2022, should not be demanded from the Company," the insurance provider said in a regulatory filing.

Stating that the input tax credit (ITC) case is an industry-wide issue, the company assured that it will take appropriate steps in due course to reply to the show cause notice and contest the matter.

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"It may be noted that Rs 250 crore has been deposited under protest with the authority (DGGI) in this matter in the past," the private sector insurer added.

On June 20, HDFC Life said that the Competition Commission of India has approved HDFC Ltd — one of the promoters of the company — to increase its stake in HDFC Life to more than 50 percent.

In a filing on Friday, HDFC Life said the Insurance Regulatory and Development Authority of India (IRDAI) has granted its approval for transfer of shares of HDFC Life, from HDFC Ltd to HDFC Bank.

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"We also wish to inform that IRDAI vide its said letter has also granted its approval for HDFC Limited to acquire additional shares in HDFC Life so as to hold more than 50 percent of its total share capital," HDFC Life said.

(With inputs from PTI)