look news india
Mumbai: The country's second largest IT company, which set up its IT infrastructure after the implementation of GST tax in the country. There has been an uproar in the IT industry regarding the pre-show cause notice issued by the Karnataka State Revenue Department to Infosys for payment of Rs 32,403 crore GST on expenses incurred by the company's overseas branch for the period July 2017 to March 2022. The notice to pay tax equal to the company's annual profit has caused investors to lose wealth worth Rs 19,369 crore as the share price fell by 2.49 percent in two days. The Karnataka government's tax department has withdrawn the notice and now Infosys will have to respond to the Central Government's Directorate of GST Intelligence (DGGI), the company clarified on Thursday.
After the report was released late on Wednesday evening, Infosys shares fell 0.84 percent on Thursday and again 1.67 percent on Friday to close at Rs 1,821.40. Due to the two-day decline, investors have suffered a loss of Rs 19,369 crore due to true and false notices of Rs 32,403 crore. Investors are currently bearing the brunt of such unnecessary disputes, while Infosys is considered the country's largest company in terms of wealth creation and returns to investors.
There has been a dispute going on between the Congress government of Karnataka and the industry for some time now. The state cabinet had decided to give 100% employment to local people in the companies working in the state. And Karnataka is the country's top state in the field of technology and at that time the major companies working here had raised the banner of protest against the state government. After this, the state government withdrew this decision.
Infosys founder and the country's IT industry's patriarch Narayan Murthy is also embroiled in controversies these days. He recently made a statement that India cannot influence China, India cannot become a superpower in the manufacturing sector. The central government is presenting India as an alternative to China in the world, in such a situation Murthy's controversial statement is being considered against it. However, Moot has been embroiled in controversy earlier also regarding the number of working hours. There is also talk that the state and central government have taken revenge on Infosys for criticizing the government. The controversy over the huge GST notice for the company is not over. Only Karnataka has withdrawn the notice, now the Center has to respond to DGGI.
In this entire controversy, the country's IT industry's apex body NASSCOM has also jumped into it. Taking the side of the mooted company Infosys, NASSCOM said in a statement that the tax department has no knowledge of how the IT industry works. The tax department should work on the basis of the decision of the GST Council and the circular issued by the government so that such uncertainty does not spread.
According to sources, the amount paid by Infosys is shown as expenditure on work done by the foreign branch. In such a situation, Infosys will have to pay GST under the reverse charge mechanism (i.e. the one who spends pays the tax). According to the department, the operations of the foreign branch are considered as imports in India and have to be taxed.