The Directorate General of GST Intelligence (DGGI) has been investigating Infosys since 2020 in connection with tax evasion allegations related to the import of services from its branch offices abroad. The case revolves around a tax evasion amount of ₹32,403 crore for the period between July 2017 and March 2022.
Anil Kumar Gupta, Principal Director General of DGGI, confirmed that Infosys is expected to submit a reply to a pre-show cause notice soon. Following this, the DGGI will decide on further action. "We only take up cases that are legally tenable under the prevailing GST laws," Gupta stated.
The investigation was initially handled by the DGGI but was later transferred to state GST authorities in April 2024, after multiple agencies began investigating the same case. In July 2024, however, the case was transferred back to the central authorities.
The government's decision regarding the taxation of services imported by Infosys from its foreign branches is still under deliberation, as the authorities weigh the potential impact on one of India’s leading IT firms. "Whatever the government decides, we will implement accordingly," Gupta added.
The outcome of this case will have significant implications for similar cases involving the taxation of services provided by Indian multinationals from their foreign branches under GST regulations.
CAclubindia
