The Company Who Made Income Tax Portal Is Under Investigation For Rs 32,000 Cr GST Evasion; Infosys Clarifies

Amidst the record high tax return filing to frustration over glitches on the ITR portal, the netizens aka taxpayers are also outraged over a news article that sent shockwaves in the IT sector. It is related to Infosys and the report has stated that the tech giant is under investigation for over Rs 32,000 crore of GST evasions. Infosys has responded to the claims and also admitted receiving notices from the Karnataka GST authority and even the Director General of GST Intelligence.

Netizens expressed displease over the glitches on the Income Tax portal that hindered their ITR filing on the deadline aka July 31. They went on to drag Infosys over the news article about GST evasion and the fact that this IT company is also the one who developed the new e-portal of income tax.

One user through his X handler said, "Infosys gets 4,200 Cr notice for managing India's income tax portal and then gets a 32,000 Cr tax evasion notice."

The user added, "Incidentally, Infosys bagged the order to design the website for GST in 2015 to build and maintain the GST technology network for five years & 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."

As per the Infosys website, the company played a pivotal role in executing a large-scale transformation project by creating a platform that unified 38 tax offices from across the country and implementing an award-winning solution for indirect taxation. Not just that, Infosys has also set up the entire Goods and Services Tax Network, laying the base for critical infrastructure.

Infosys' website claims that the IT portal is a lightweight and immensely scalable platform that can handle 75 million hits per day, more than 50,000 transactions per second and peak filing volumes of 1.2 billion per day.

However, the netizens would like to disagree with it since they're facing immense glitches. It needs to be noted that glitches on the ITR portal are not a new issue, it has been there since the new portal was launched in June 2021, on periodical occasions while the issue would be greater during the ITR filing deadline.

What Infosys has to say about the new GST evasion allegations?

As per the regulatory filing, Infosys clarified that Karnataka State GST authorities have issued 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 has responded to the pre-show cause notice, Infosys said.

Further, Infosys revealed that subsequent to the publication of the news articles the company has also received a pre-show cause notice from the Director General of GST Intelligence on the same matter and the Company is in the process of responding to the same.

Over the matter, Infosys said that "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."

Also, Infosys said, "It is also important to note that the GST payments are eligible for credit or refund against export of IT services."

Thereby, Infosys added that it has paid all its GST dues and is fully in compliance with the central and state regulations on this matter.

The share price of Infosys will be in focus on Thursday.