The Goods and Services Tax (GST) investigative arm, Directorate General of Goods and Services Tax Intelligence (DGGI), has given partial relief to IT services major Infosys by closing the tax proceedings for financial year 2017-18 (FY18), the company informed exchanges on Saturday evening. The GST amount during this period was Rs 3,898 crore.
The move follows the withdrawal of a Rs 32,000 crore GST notice issued to Infosys by the Karnataka state GST authority.
However, there is no clarity on the notices served for the remaining financial years (2018-19, 2019-20, 2020-21, 2021-22) on the IT major.
Notably, the GST demand raised for FY18 is getting time-barred on August 5.
The matter pertains to the unpaid integrated GST (IGST) under the reverse charge mechanism (RCM) for services claimed to be received from its foreign affiliate. Infosys allegedly did not pay IGST on services received from overseas branches under RCM.
The company had received and responded to a pre-show cause notice issued by DGGI for the period from July 2017 to March 2022. The company has now received a communication from DGGI closing the pre-show cause notice proceedings for the financial year 2017-2018.
“The GST amount as per the pre-show cause notice for this period was Rs 3,898 crore,” Infosys stated.
Sources said the Central Board of Indirect Taxes and Customs (CBIC) is reviewing the matter under the June 26 circular. The circular states that for the import of services, the deemed open market value of such transactions will be NIL if full input tax credit is available. However, whether Infosys is eligible for this review is still underway.
First Published: Aug 03 2024 | 11:46 PM IST
