The Directorate General of GST Intelligence (DGGI) has sent a pre-showcause notice to Infosys for failing to pay Integrated Goods and Services Tax (IGST) on services obtained from overseas branches. As per the notice, the IT company has unpaid taxes amounting to ₹32,403 Crore for the period of July 2017 to July 2021–2022. Infosys has not yet responded to the notice but is expected to have enough time to explain and contest it. The tax authorities state that the company failed to pay IGST under the reverse charge mechanism, which requires the recipient of services to pay the tax.
Infosys Faces IGST Tax Evasion Allegations
Background
Infosys Limited, a leading Indian IT services company, has been issued a pre-showcause notice by the Directorate General of GST Intelligence (DGGI) for alleged non-payment of Integrated Goods and Services Tax (IGST) on services obtained from its overseas branches.
According to the notice, Infosys owes ₹32,403 crore in unpaid taxes for services received between July 2017 and July 2021–2022. The tax authorities allege that Infosys failed to pay IGST under the reverse charge mechanism, which requires the recipient of services to pay the tax.
Current Situation
Infosys has not yet responded to the notice, but is expected to have ample time to explain and contest it. If found guilty, the company could face penalties, including fines and interest payments.
Top 5 FAQs and Answers
1. What is the reverse charge mechanism?
The reverse charge mechanism is a provision in the GST law that requires the recipient of services from a foreign entity to pay IGST directly to the government.
2. Why is Infosys being accused of not paying IGST?
The DGGI alleges that Infosys received services from its overseas branches without paying the required IGST under the reverse charge mechanism.
3. What are the potential consequences for Infosys?
If found guilty, Infosys could face penalties, fines, and interest payments. The company's reputation and credibility could also be damaged.
4. Has Infosys been accused of tax evasion before?
In 2018, the Income Tax Department launched an investigation into Infosys for alleged tax evasion. The investigation is ongoing.
5. What can Infosys do to defend itself against these allegations?
Infosys can contest the notice by providing evidence that it did not evade taxes and that it has paid all required IGST. The company can also challenge the DGGI's interpretation of the law.
Conclusion
The allegations against Infosys are serious and could have significant implications for the company and its stakeholders. The company has the opportunity to provide its side of the story and contest these allegations. The outcome of the DGGI investigation and the final decision of the tax authorities will determine the extent of Infosys' liability and the impact on its future operations.
Despite President Trump's dismissal of a top Federal Reserve official, investors shrugged off concerns and pushed stocks higher. The Dow, S&P 500, and Nasdaq all finished the day in positive territory, with the Dow hitting a new record closing high. While the move to remove the official raises questions about the Fed's independence, investors are focused on upcoming economic indicators, including a report on inflation and highly anticipated earnings reports from tech giants like Nvidia. Meanwhile, the digital currency Bitcoin continues to struggle, dropping below $110,000 for the first time in two weeks.
In an effort to reduce reliance on China for key minerals used in advanced technologies, India is exploring partnership with a rebel group in Myanmar to secure rare earth samples. The Ministry of Mines has directed state-owned and private companies to collect samples from Kachin Independence Army-controlled mines and test them in domestic labs. This move comes in light of China's recent export restrictions on rare earth magnets, causing disruptions in global supply chains.
Oracle chairman Larry Ellison, who hails from the Bronx, has surpassed Tesla CEO Elon Musk as the richest person in the world with a net worth of $405 billion. This jump in wealth was reported by Barron's on Wednesday, putting Ellison ahead of Musk's net worth of $390 billion. This milestone marks a shift in the top spot amongst the world's wealthiest individuals.
The US Producer Price Index fell 0.1% in August, bucking expectations of a rise and indicating a potential slowdown in overall economic growth. The decline was driven by a slump in the cost of services, particularly within wholesalers and retailers. The news has led to a drop in Treasury yields and solidifies expectations of an interest rate cut by the Federal Reserve next week.
The Hilton Kathmandu, once a symbol of Nepal's ambition and modern design, recently fell victim to violent anti-government protests. The hotel, built by the Shanker Group with a significant investment and featuring luxurious amenities and seismic safeguards, opened in 2024 but tragically, went up in flames a year later. The Hilton was not just a hotel, but a cultural statement, embodying Nepalese heritage and offering breathtaking views of the Langtang range.
In a shocking incident, a brand-new Mahindra Thar crashed through a glass wall and landed on the road below in Delhi's Preet Vihar. The SUV had just been purchased by a couple who were inside the vehicle at the time with a showroom salesman. Fortunately, no one was seriously injured in the accident. The incident, captured on video, has gone viral on social media. Police are investigating the cause of the incident.
Delhi-based manufacturer Vikas Ecotech has acquired an existing Plasticizer Manufacturing Business, valued at Rs 270 million, in an all-cash deal. With this acquisition, the company aims to enhance its product offering and become debt-free by 2023-24. This move comes after the firm recently paid off Rs 101 crore of its debt to lenders.
The Indian Express has obtained information that the Registrar General of India has requested a budget of Rs 14,618.95 crore for the upcoming Census 2027. This will be the first "digital census" and will include the collection of caste data through dedicated mobile applications. The option for self-enumeration will also be provided to the public. Additionally, Indian refiners have saved approximately $12.6 billion in the past three years through their Russian oil imports, which has caused tensions with the Trump administration.
The Trump administration's latest move has caused major disruptions in the Indian export industry with the imposition of 50% tariffs on Indian goods. Sectors such as apparel, textiles, gems, and jewelry will bear the brunt of the higher tariffs, putting low-skilled jobs in India at risk. India's response has been to extend tariff exemptions on cotton imports, but many are criticizing the government for not taking strong action against the US. Political figures like Saurabh Bhardwaj and Akhilesh Yadav have slammed the BJP-led government for its failed foreign and economic policies which are negatively impacting traders, manufacturers, and workers.
The highly anticipated 2025 model of the popular Suzuki Access 125 has finally been unveiled at the Auto Expo. While it comes in three variants and boasts 5 different colour options, there are complaints about the fluctuating mileage and poor design choices such as fixed mirrors. With tough competition in the two-wheeler market, Suzuki may need to offer attractive deals to customers to stay ahead.