Infosys logo.
Credit: Reuters File Photo
Bengaluru: Tech giant Infosys Ltd is under investigation by the Directorate General of GST Intelligence (DGGI) for alleged integrated Goods and Service Tax (GST) evasion of more than Rs 32,000 crore, sources in the Union government confirmed to DH.
The alleged evasion is for the period July 2017 to March 2022, and pertains to non-payment of IGST on import of services, a source said.
"The company has imported services from its overseas branches, but has not paid IGST on the same," the official said.
In a statement issued to the stock exchanges late on Wednesday, however, the Bengaluru-headquartered IT services behemoth said that according to regulations, GST is not applicable on these expenses.
Infosys confirmed to the exchanges that it had received a pre-show cause notice from the DGGI for GST payment of Rs 32,403 crore and has responded.
"Karnataka State GST authorities have issued a pre-show cause notice for payment of GST of Rs 32,403 crore for the period July 2017 to March 2022 towards the expenses incurred by overseas branch offices of Infosys Limited. The Company has responded to the pre-show cause notice," it said.
Infosys asserted that according to a circular dated June 26, 2024, issued by the Central Board of Indirect Taxes and Customs (CBIC) on the recommendations of the GST Council, services provided by the overseas branches to the Indian entity are not subject to GST.
"It is also important to note that the 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," it said.
Incidentally, the GST Network (GSTN) is maintained by Infosys.
This is not Infosys’ first brush with the indirect tax department this financial year.
In April, the Odisha GST Authority had imposed a penalty of Rs 1.46 lakh on the company for availing ineligible input tax credit for 2018-19.