‘No GST on foreign branch services to Indian entities’
Infosys, the Bengaluru-based IT giant, said in a Bombay stock exchange filing that they have paid all Goods and Services Tax (GST) dues and are fully in compliance with the central and state regulations on this matter. A statement said that the company has received a pre-show cause notice for payment of GST of Rs 32,403 crores for the period July 2017 to March 2022 towards the expenses incurred by overseas branch offices of Infosys Limited.
“The Company believes that as per regulations, GST is not applicable on these expenses. Additionally, as per a recent Circular (circular number 210/4/2024 dated June 26, 2024) 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,” the statement read.
Infosys said that The Directorate General of GST Intelligence (DGGI), which oversees the enforcement and investigation of GST violations, has also issued a notice. DGGI said that Infosys is liable to pay IGST (Integrated Goods and Services Tax) under the reverse charge mechanism for supplies received from branches located outside India. The specified period for this demand spans from July 2017 to March 2022.
Infosys added that GST payments are eligible for credit or refund against the export of IT services. “Infosys has paid all its GST dues and is fully in compliance with the central and state regulations on this matter,” the company said.
Incidentally, Infosys bagged the order to design the website for GST in 2015 to build and maintain the GST technology network for five years for Rs 1,380 crore. They also built the Income Tax site for e-filing in 2021, in addition to the website for the Ministry for Corporate Affairs to access company records. Numerous complaints have been expressed about the income tax portal, which has been facing repeated glitches.
