Mumbai, February 5, 2025 – HDFC Life Insurance Company Limited has disclosed a GST order received from the Additional Commissioner, CGST & C.Ex, Palghar Commissionerate, Mumbai, Maharashtra, on February 4, 2025. The company has confirmed that the order will have no adverse material impact on its financial operations and intends to contest it before the Appellate Authority.
Key Highlights of the GST Order
Authority
The Additional Commissioner, CGST & C.Ex, Palghar Commissionerate, Mumbai, Maharashtra
Nature of Action
GST Order
Period Covered
July 1, 2017 – March 31, 2023
Tax Demand
₹82.65 crore
Interest
Nil
Penalty
₹96.93 crore
Basis of the Tax Demand
The order raised concerns over:
GST demand under the reverse charge mechanism, despite being paid under the forward charge.
Non-consideration of GST credit paid under the reverse charge mechanism.
Company’s Response and Next Steps
Rectification Application: HDFC Life is in the process of filing a rectification application before the tax authorities. Post-rectification, the estimated tax demand is expected to be revised down to ₹40.06 crore, with a corresponding adjustment in the penalty.
Appeal Process: The company has stated that the GST Order is appealable, and it will file an appeal within the specified period, incorporating the rectification points.
Impact on Financial & Operational Performance
HDFC Life has reassured stakeholders that the order will not impact the company's financial operations.
Investor Outlook
Despite the tax demand, HDFC Life remains confident in its compliance with GST regulations. The company's proactive approach in addressing the rectification and filing an appeal reinforces its commitment to regulatory adherence.
