Citing a government source, news agency Reuters reported on August 6 that the government is not seeking to ease the tax demand it sent to IT giant Infosys in July. The government had sent the company a tax demand totaling more than Rs 32,000 crore ($4 billion).
These tax demands are a result of the goods and services tax (GST) regulations. After meeting with tax officials, Infosys, the second-largest IT services company in India, requested ten days to submit its response, the same source told the media. The source claimed they were not authorized to speak to the media, which is why they did not want to be identified.
Amidst a general market upswing, Infosys’ shares, which had been up 1.6% prior to the announcement, momentarily reduced their gains to roughly 0.3% after the news. Their last gain was 1.2%.
The company received services related to tax from its overseas branches between July 2017 and July 2021-2022. For the quarter that ended on June 30, this represents 85% of its revenue. Infosys said in a notice to stock exchanges on August 3 that it had received communication that Rs 3,898 crore demanded for the financial year 2017–18 had been closed.
Infosys had previously declared that it had fulfilled all legal obligations and complied with all federal and state regulations. According to Reuters, emails seeking comment were not immediately answered by Infosys or the Finance Ministry.
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