• Notification Date: 03-01-2025
• Notification No: N/A

HDFC Life faces ?270.58 crore GST demand, plans to appeal

Maharashtra State Tax Department has sent a GST demand notice of ?270.58 crore to HDFC Life Insurance for the fiscal 2020-2021.
The notice includes ?152.87 crore as tax and ?117.71 crore as interest. These two orders were passed on December 31, 2024, by the Assistant Commissioner of State Tax in Mumbai.

It is further alleged that the company has been reversing non-proportionate input tax credit of common services consumed in the supplies that have been exempted and claiming extra input tax credit under the reverse charge mechanism.
However, HDFC Life states that such orders do not have any material adverse effect on its business.
The giant insurance house filed its appeal of the judgment pronounced earlier before the Appellate Authority within the prescribed time.

HDFC Life has registered a growth of 14.8% in its net profit during Q2 FY25 at ?433 crore, as against ?377 crore from the same period last year.
Net premium income has also grown 12% YoY at ?16,570 crore, and new business premiums grew by 14% at ?8,097 crore.
HDFC Life shares closed up marginally at ?617.15 on Wednesday, with the stock up ?0.25 or 0.04% after the company received a demand notice from GST authorities.

The company also remains positive in holding onto a growth target of around 15% for FY25 while maintaining around 26% strong margin.
HDFC Life has also refused the rumors surrounding any amendment in the bancassurance regulations.
Moreover, the management has maintained an outlook that suggests steady progress.

The decision of the insurer to appeal the GST claim will be eagerly followed, but the company has been comforting everyone that its operations will remain unchanged as it seeks legal remedy.