General Insurance Corp of India Hit with ₹90.42 Crore VAT Demand From Dubai FTA

The General Insurance Corporation of India (GIC Re), the country's largest reinsurer, is facing a VAT demand of approximately ₹90.42 crore from the Federal Tax Authority (FTA) in Dubai. This demand, which includes both net due tax and administrative penalties, arises from identified discrepancies in VAT returns filed by GIC Re's Dubai branch for the period between January 1, 2018, and December 31, 2020. Despite the substantial amount, GIC Re has stated that this VAT demand does not materially impact its financial position or operations. The company is currently reviewing the order and plans to file a reconsideration request within the statutory timeline. This incident highlights increasing compliance challenges for Indian public sector enterprises operating internationally, especially in regions like the UAE where VAT regulations have evolved. GIC Re, which uses its Dubai operations to expand into the Middle East and North Africa reinsurance markets, emphasizes strict tax compliance to avoid large retrospective liabilities and assures stakeholders that its core activities remain unaffected.