Govt unlikely to relax its Rs 32,000-crore tax demand on Infosys

The government is not considering any relaxation over the Rs 32,000-crore tax demand it sent to Infosys Ltd, Reuters reported on Tuesday (August 6) citing a government source.

The tax demand on Infosys is in accordance to the GST rules. Infosys had sought 10 days to reply to the pre-show cause notice after a meeting with Directorate General of GST Intelligence (DGGI) Bengaluru on August 5, reported CNBC-TV18.

Shares of Infosys, which were up 1.6% on August 6 before the report amid a broader market rebound, trimmed gains to about 0.3% after the report. CNBC-TV18 reported, citing sources, that DGGI said pre-show cause notice was sent after proper assessment and due diligence

Earlier, GST authorities slapped a Rs 32,403 crore notice on Infosys last week for services availed by the company from its overseas branches for five years starting 2017. This amounts to 85% of its revenue for the quarter ended June 30.

The company had described the notice a ‘pre-show cause’ notice and categorically maintained that it believes that GST is not applicable on expenses mentioned.

Infosys had strongly argued that GST payments are eligible for credit or refund against export of IT services. “Infosys has paid all its GST dues and is fully in compliance with the central and state regulations on this matter,” the company had contended.