IT major Infosys has received a tax notice of over Rs 32,000 crore for alleged GST evasion. The Directorate General of GST Intelligence is investigating the company, as per an Economic Times.
The company is being reportedly investigated for tax evasion between July 2017 and 2020-2022. The investigation is being reportedly done for “non-payment of IGST on import of services as recipient of services.”
The document accessed by the Economic Times reads, “Thus, in lieu of receipt of supplies from overseas branch offices, the company has paid consideration to the branch offices in the form of overseas branch expense. Hence, M/s Infosys Ltd., Bengaluru, is liable to pay GST under the reverse charge mechanism on supplies received from branches located outside India.”
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Just to give some context, a reverse charge mechanism is a system in which the responsibility for paying tax falls on the recipient of goods or services rather than the provider.
While Infosys received the notice, the company believes that it is in full compliance with the GST laws, adds the report.
In April this year, the IT giant received a demand notice of Rs 341 crore from the Income Tax department.
The company mentioned in an exchange filing, “Infosys Ltd., on March 31, 2024, received an order under Sections 201 & 201(A) of the Income Tax Act, 1961, from the Income Tax Department, Government of India, for assessment year 20-21 with a tax demand of ₹341 crores (including interest).”
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To add to it, a subsidiary of the company also received a demand order of Rs 15 crore for assessment year 2014-15. The notice says, “The refund amount as per the order is INR 15 crores. The Company is in the process of evaluating the implications of this order on the financial statements for the quarter and year ending March 31, 2024.”
