HDFC Life Insurance has received a cause-and-demand notice from the Directorate General of Goods and Services Tax Intelligence asking why the insurance company should not have demanded tax of around Rs 942.18 crore from it.

“The matter concerns a claim for an input tax credit for the provision of services, which the (tax) authorities do not consider compliant. The company has been advised by its legal and tax advisors that it has a good contestable case,” HDFC Life said in a stock exchange filing on Friday.

The company said that this is an industry-wide issue and that appropriate steps will be taken to respond to the cause notice and dispute the matter.

The Mumbai regional unit of the Directorate General of Goods and Services Tax Intelligence has sent notifications to private insurers for July 2017 to FY22. HDFC Life told the stock exchange that it had lodged a protest with the tax authority on the matter in the past and had deposited Rs 250 crore.

The insurance company also informed that IRDAI had approved HDFC Limited to acquire additional shares in HDFC Life so that it holds more than 50% of its total share capital. “We wish to inform you that the Insurance Regulatory and Development Authority of India (IRDAI), vide its letter dated June 23, 2023, has approved the transfer of shares of HDFC Life from HDFC Limited to HDFC Bank in pursuance of the proposed amalgamation, in terms of Section 6A of the Insurance Act, 1938,” it said.

Notably, the Competition Commission of India approved HDFC to increase its stake in HDFC Life to more than 50% at its meeting held on June 20. The RBI in April allowed HDFC Bank or HDFC Limited to increase its stake in HDFC Life above 50%.

HDFC held a 48.65% stake in HDFC Life as of the end of the fourth quarter of the last fiscal year.