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Infosys Ltd, on Friday (June 6) said that the DGGI has closed pre-show cause notice proceedings related to an earlier inquiry into non-payment of IGST under the Reverse Charge Mechanism. The closure pertains to the financial years 2018-19 to 2021-22.
The issue surrounding a Goods and Services Tax (GST) demand notice for approximately Rs 32,000 crore against information technology (IT) major Infosys is likely to take longer amid the GST law committee still deliberating its options before any decision can be brought up before the GST Council for its approval.
Infosys has said that it has received a penalty notice of over Rs 3 crores from the Deputy Commissioner of Commercial Taxes in Bengaluru. The penalty pertains to alleged discrepancies in tax payments and the excessive use of Input Tax Credit for the financial year 2019-20.
India is likely to retract its demand that Infosys pay $4 billion in back taxes after weeks of lobbying by the IT giant and an onslaught of criticism from the software services industry, said two government sources with direct knowledge of the plan.
The Centre may grant GST relief to Infosys, foreign shipping lines and foreign airlines, CNBC-TV18 reported. The government is mulling changes in a June circular in the forthcoming GST council which is scheduled for September 9.
India’s second-largest information technology (IT) company Infosys’ next move will likely be to approach the Karnataka High Court in the Goods and Services Tax (GST) evasion matter, with the odds stacked in favour of the Bengaluru-based company. There are several laws and precedents that will make it a cakewalk for Infosys to squash all the claims made by the GST department, tax experts say.
The information technology (IT) sector was recently shaken by a substantial Goods and Services Tax (GST) notice issued to Infosys. The Karnataka state authorities had sent a “pre-show cause” notice to the IT giant, demanding Rs 32,403 crore in GST claims.
Infosys issued a clarification statement to all the stock exchanges in connection with the GST Notice received from DGGI.
DGGI, has given partial relief to IT services major Infosys by closing the tax proceedings for financial year 2017-18 (FY18), the company informed exchanges on Saturday evening. The GST amount during this period was Rs 3,898 crore.
IT major Infosys on August 1 said that Karnataka state authorities have withdrawn the pre-show cause notice it received a day earlier and directed the company to submit further responses to the Directorate General of Goods and Services Tax Intelligence (DGGI) related to the issue.