BENGALURU: Infosys, the second largest IT services company in the country, has been slapped with Rs 32,403 crore GST evasion notice by the Directorate General of GST Intelligence (DGGI). The pre-show cause notice is for non-payment of GST from July 2017 to March 2022 towards expenses incurred by its overseas branch offices.
The company in a BSE filing said Karnataka State GST authorities first issued a notice. Subsequently, Infosys received a notice from DGGI. According to the notice viewed by this paper, “Infosys Ltd, Bengaluru is liable to pay IGST (Integrated Goods and Services Tax) under reverse charge mechanism on supplies received from branches located outside India to the tune of Rs 32,403.46 crores for the period 2017-18 (July 2017 onwards) to 2021-22.”
In its filing, Infosys said, “The Company believes that as per regulations, GST is not applicable on these expenses. Additionally, as per a recent Circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, services provided by the overseas branches to Indian entity are not subject to GST.”
Paid all GST dues: Infosys
Infosys paid all its GST dues, the company added. It cited a June 26, 2024 CBDT circular, which said that in cases where full input tax credit is available to the recipient, if the invoice is not issued by the related domestic entity with respect to any service provided by the foreign affiliate, the value of such services may be deemed as nil.
Former Infosys chief financial officer Mohandas Pai, in a post on X said, “If this notice is correct this is Outrageous, a case of TaxTerrorism at its worst. Service exports from India are not subject to GST. Can officials interpret anything they want?”