Tax
HDFC Life Faces Rs 271 Crore GST Demand, Plans to Appeal Orders
MUMBAI: HDFC Life Insurance Company has disclosed receiving two Goods and Services Tax (GST) orders from the Assistant Commissioner of State Tax. The orders, covering the financial year April 1, 2020, to March 31, 2021, demand a total tax of Rs 152.87 crore along with interest of Rs 117.71 crore. Notably, no penalty has been levied.
The allegations include under-reversal of input tax credit (ITC) on common services linked to exempted supplies and excess ITC claimed under the reverse charge mechanism. In a regulatory filing, HDFC Life assured stakeholders that these orders would not have any material adverse impact on its financial operations. The company intends to challenge the orders by filing an appeal with the Appellate Authority within the stipulated timeframe.
“These orders will not adversely affect the company’s financial performance, and we remain committed to contesting them through the appropriate legal channels,” HDFC Life stated.
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Financial Resilience Amid Challenges
Despite the tax demand, HDFC Life continues to showcase robust financial performance. For the second quarter (Q2) of FY25, the company reported a 14.8% year-on-year increase in net profit, reaching Rs 433 crore compared to Rs 377 crore in the same period last year.
New business premiums grew by 14% to Rs 8,097 crore, slightly below market expectations of Rs 8,167 crore. Net premium income rose by 12% YoY to Rs 16,570 crore, while the total annual premium equivalent (APE) surged 26.7% to Rs 3,858 crore.
HDFC Life has reaffirmed its growth target of 15% for FY25, with an expected profit margin of 26%.
Market Performance
Shares of HDFC Life Insurance closed at Rs 617.15 on the BSE, marking a marginal gain of Rs 0.25 or 0.041%.
HDFC Life’s ability to navigate regulatory challenges while maintaining strong financial growth highlights its resilience and commitment to long-term success.
