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Infosys is likely to approach the Karnataka High Court to challenge the GST evasion case against it.
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Tax experts believe that Infosys has a strong case, citing a recent circular from the Central Board of Indirect Taxes and Customs (CBIC) that supports the company’s position.
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The case relates to an alleged tax evasion of over Rs 32,000 crore, but experts say that Infosys is likely to win the case.
Infosys, India’s second-largest IT company, is likely to challenge the GST evasion case against it in the Karnataka High Court. The company received a pre-show cause demand from the Directorate General of GST Intelligence (DGGI) for alleged tax evasion of over Rs 32,000 crore. However, tax experts believe that Infosys has a strong case and is likely to win.
The experts cite a recent circular from the Central Board of Indirect Taxes and Customs (CBIC) that states that if services between related parties do not have an invoice, they will be considered “NIL” in value. This supports Infosys’ position that it did not evade taxes. Additionally, the industry body Nasscom has come out in support of Infosys, saying that this is not a new problem and courts have been ruling in favor of the industry in similar cases.
Infosys is likely to bypass the usual adjudication process and directly approach the High Court by filing a writ petition under Article 226. The company has consistently maintained that the expenses incurred for its foreign branches and subsidiaries do not constitute taxable services, but rather operational costs necessary for running those entities.
