General Insurance Corp of India Hit with ₹90.42 Crore VAT Demand From Dubai FTA
GIC Re has disclosed a Rs. 90.42 crore VAT demand from Dubai’s tax authority over past filing discrepancies, stating it will contest the order without impact on its operations.
General Insurance Corporation of India (GIC Re), the country’s largest reinsurance company, has reported that its Dubai branch has received a value-added tax (VAT) demand amounting to approximately Rs. 90.42 crore from the Federal Tax Authority (FTA) of the United Arab Emirates. The demand arises from discrepancies identified in the VAT returns filed by the...
General Insurance Corporation of India (GIC Re), the country’s largest reinsurance company, has reported that its Dubai branch has received a value-added tax (VAT) demand amounting to approximately Rs. 90.42 crore from the Federal Tax Authority (FTA) of the United Arab Emirates. The demand arises from discrepancies identified in the VAT returns filed by the corporation’s Dubai operations for the period between January 1, 2018, and December 31, 2020.
The VAT demand includes AED 12,868,602.71 in net due tax, as determined by the tax audit results, and AED 25,966,807.36 in administrative penalties imposed by the FTA. The total demand in rupee terms translates to approximately Rs. 90.42 crore, underscoring the scale of the financial claim placed on the insurer’s international operations.
Despite the substantial amount involved, GIC Re has disclosed that this VAT demand does not have a material impact on its financial position, operations, or other activities. The company stated that it is currently reviewing the order in detail and intends to file a reconsideration request with the authority within the statutory timeline.
The VAT demand highlights the rising compliance challenges faced by Indian public sector enterprises operating in overseas jurisdictions, particularly in regions such as the UAE where VAT regulations have evolved significantly since their introduction in 2018. Companies operating in the UAE are required to maintain strict documentation and reporting practices to ensure alignment with the FTA’s compliance framework, and the case with GIC Re underscores the risks of retrospective demands in this environment.
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For GIC Re, which has been actively using its Dubai operations to expand its presence in the Middle East and North Africa reinsurance markets, this development underlines the importance of ensuring tax compliance in line with local laws to avoid large retrospective liabilities.
The company explained that it is taking all necessary steps to address the order, including evaluating legal and procedural options under UAE laws to seek reconsideration or rectification of the demand. GIC Re also assured stakeholders that its core reinsurance activities and international operations remain unaffected, and it is committed to maintaining compliance across all jurisdictions where it operates.
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