NEW DELHI: A senior official has confirmed that the Indian government will not retract the tax demand of Rs 32,000 crore against IT giant Infosys, citing strong evidence in the case related to goods and services tax (GST).
The official stated, “The government is firm in its decision. The law will take its own course. If there is a demand, then the company would have to settle it.” Additionally, other companies with foreign branches may also face similar tax demands.
Recently, Infosys received partial relief from the Directorate General of GST Intelligence (DGGI) regarding allegations of tax evasion linked to free services provided by its foreign subsidiaries. However, this relief was granted on technical grounds, as the tax demand can’t exceed a five-year limit.
The demand was issued by the DGGI on July 31, claiming tax evasion that exceeds Rs 32,000 crore. Following this, Infosys announced that the Karnataka state authorities had withdrawn a pre-show cause notice issued the same day and requested additional information from the company for the DGGI’s review.
In its defence, Infosys has stated that it has settled all its GST payments and contends that the DGGI’s claims do not pertain to its legitimate expenses. The company emphasised its compliance with all applicable central and state regulations in a filing on July 31.
The pre-show cause notice came shortly after media reports surfaced regarding the Karnataka state GST authorities’ notice on the same matter, as disclosed by Infosys in its July 31 filing.