Last Updated on 01/08/2024 by wccexam Desk
IT company Infosys has been accused of tax evasion of Rs 32 thousand crores. On this, the Director General of GST Intelligence has issued a notice to Infosys and sought a reply.
According to the report, this case of tax evasion is from July 2017 to 2021-2022. It is alleged that during this period Infosys received services from its foreign branches but did not pay tax of Rs 32,403 crore on them. The tax document states that Infosys is under investigation for not paying IGST on import of services as a recipient of services.
What explanation did Infosys give on these allegations?
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Infosys has termed this notice as a pre-show cause notice and said that as per the rules, GST is not applicable on such expenses. Infosys said that according to a recent circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, services provided by foreign branches to the Indian unit are not subject to GST. GST payment is for credit or refund against export of IT services.
The company said that we have paid all our GST dues and are fully complying with the central and state rules in this matter.
According to the report, the tax document sent by GST officials to Infosys states that the company has not paid tax on the services received from foreign branches, hence Infosys is liable to pay an amount of Rs 32,403 crore under the reverse charge mechanism on the supplies received from branches located outside India.