Infosys shares declined on Thursday following a GST notice alleging Rs 32,000 crore in tax evasion, a claim that the IT major has vehemently disputed.
Opening at Rs 1,850, Infosys shares were trading 0.5-1 percent lower. Despite this dip, the company’s shares have surged over 20 percent since January this year.
Reports on Wednesday, citing the Directorate General of GST Intelligence, suggested that Infosys is “liable to pay IGST under the reverse charge mechanism on supplies received from branches located outside India, amounting to Rs 32,403.46 crore for the period from July 2017 to 2021-22.”
In a late evening stock exchange filing, Infosys denied these claims. “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 stated.
Infosys confirmed that it has responded to the pre-show cause notice and is in the process of responding to a similar notice from the Director General of GST Intelligence.
“The company believes that as per regulations, GST is not applicable on these expenses. Additionally, as per a recent Circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, services provided by the overseas branches to Indian entities are not subject to GST,” Infosys asserted.
The company emphasized that it has paid all its GST dues and is fully compliant with both central and state regulations regarding this matter.
