look news india
In a major reversal, Karnataka has withdrawn its notice to information technology (IT) major Infosys. The GST investigation wing had issued a notice to Infosys to recover GST tax evasion of Rs 32 thousand crore.
Apart from this, Karnataka officials have also issued a notice to Infosys. Apart from this, another interesting twist has come in the whole matter. It has also been learned that the GST investigation agency will also re-investigate the GST tax evasion notice sent to Infosys.
Infosys in a stock exchange filing said Karnataka authorities have approached the company and withdrawn the pre-showcase notice. The state authority has directed the IT company to approach the Directorate General of GST Intelligence (DGGI), a central investigating agency, in the matter.
This entire development has come to light at a time when there are reports that tax officials may also take action against some more IT companies on charges of tax evasion. Because, tax officials believe that GST evasion is not limited to Infosys only. Many Indian IT companies are believed to be setting up branches abroad and taking Indian contracts abroad to serve foreign customers. A tax department official said that all will be verified on a case-by-case basis on merit. Amid fears of notices being issued by the tax department, industry association NASSCOM in a statement urged tax officials to consider investors' concerns and business uncertainty.
IT company accused of tax evasion
If the tax department is not satisfied with Infosys' reply on tax evasion, the pre-show cause notice will be converted into a show cause notice.
The notice has been issued to Infosys for the academic year 2017, as the period for prosecuting cases for this academic year will end on August 5.
Based on the company's response, the tax department will review whether the company is eligible for full input tax credit or not.
If the matter arises out of prevailing industry practices, action can be taken under Section 11A.