On Friday, HDFC Life Insurance said that it has received a demand notice exceeding Rs 942 crore for non-payment of Goods and Services Tax (GST). The issue revolves around the company’s claim for input tax credit against the supply of services, which the Directorate of Goods and Services Tax (GST) Intelligence (DGGI) deems ineligible for such claims.

According to HDFC Life, the company received a show cause cum demand notice from the Directorate General of GST Intelligence, Mumbai Zonal Unit. The notice asks the company to explain why a tax amounting to Rs 942,18,46,028 for the period between July 2017 and FY 2022 should not be demanded from them. This information was disclosed by HDFC Life in a regulatory filing.

HDFC Life emphasized that the issue of input tax credit (ITC) is a matter affecting the entire industry. The company stated that it will take appropriate actions in due course to respond to the show cause notice and contest the matter.

It should be noted that HDFC Life had previously deposited Rs 250 crore under protest with the Directorate General of GST Intelligence in relation to this matter.

In a separate development, on June 20, HDFC Life announced that the Competition Commission of India had approved HDFC Ltd, one of the company’s promoters, to increase its stake in HDFC Life to more than 50 percent.

Furthermore, HDFC Life stated in a filing that the Insurance Regulatory and Development Authority of India (IRDAI) has granted approval for the transfer of shares of HDFC Life from HDFC Ltd to HDFC Bank. The filing also mentioned that IRDAI, through its letter, has approved HDFC Ltd to acquire additional shares in HDFC Life, thereby exceeding 50 percent of the total share capital.

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