Infosys, India’s second-largest IT company, has been issued a demand notice for alleged tax evasion amounting to over Rs 32,000 crore by the Directorate General of GST Intelligence (DGGI).
Tax Demand: The demand is for Rs 32,403.46 crore for IGST under RCM on supplies received from overseas branch offices.
Reverse Charge Mechanism (RCM): Under RCM, the recipient (Infosys in this case) is liable to pay the tax instead of the supplier.
Period of Concern: The period covered in the demand is from July 2017 onwards to 2021-22.
Overseas Branch Expenses: Infosys had paid consideration to its overseas branch offices as overseas branch expenses.
Export Invoice Inclusion: Infosys was including the expenses incurred towards overseas branches as part of their export invoices from India and computing eligible refunds based on these export values.
Impact: If proven, this would be a significant tax evasion case, potentially impacting Infosys’ financials and reputation.
