DGGI offers partial relief to Infosys, closes Rs 3,898 cr FY18 GST tax case
The research arm of Goods and Services Tax (GST), Directorate General of Goods and Services Tax Intelligence (DGGI), has given partial relief to IT services giant Infosys by closing its tax dues for the financial year 2017-18 (FY18), the company told exchanges on Saturday night. The GST dues during this period stood at Rs 3,898 crore.
This move follows the withdrawal of a GST notification of Rs 32,000 crore issued by the Karnataka state GST authority to Infosys.
However, there is no clarity on the notifications issued for the remaining financial years (2018-19, 2019-20, 2020-21, 2021-22) for the IT direction.
It is notable that the GST requirement for financial year 2018 expires on August 5.
The issue pertains to unpaid integrated GST (IGST) under the reverse charge mechanism (RCM) for services allegedly received from its foreign affiliate. Infosys is alleged to have not paid IGST on services received from foreign affiliates under RCM.
The company had received and responded to a pre-show cause notice issued by DGGI for the period July 2017 to March 2022. The company has now received a notice from DGGI closing the pre-show cause notice process for the financial year 2017-18.
“The GST amount as per the prior notification for this period was Rs 3,898 crore,” Infosys said.
Sources said the Central Board of Indirect Taxes and Customs (CBIC) is examining the issue based on its circular dated June 26. The circular states that for import of services, the deemed open market value of such transactions will be NIL if full input tax credit is available. However, whether Infosys qualifies for this assessment is still pending.
First print: Aug 03, 2024 | 11:46 PM IST