The second-largest IT services company in India, Infosys, is facing significant tax demands from the government, which it will not budge on.
The demand was made last month in compliance with GST regulations, and the tax authorities are not considering any leniency.
Infosys Asks For Ten Days Extension, Indian Government Declines
Following a meeting with tax authorities, Infosys has requested an extension of ten days to deliver their answer.
Over ₹32,000 crore ($4 billion) in tax is due to the corporation for services rendered by its foreign branches between July 2017 and the fiscal year 2021–2022.
This sum represents roughly 85% of the business’s revenue for the quarter that concluded on June 30.
Infosys announced to stock exchanges on August 3rd that the 38.98 billion rupee demand for the 2017–18 financial year has been closed.
In the past, Infosys has insisted that it complies with all federal, state, and local laws and has paid all of its obligations.
Infosys Fined By Canadian Government in May 2024
Infosys was fined CAD 1,34,822.38 (₹82 lakh) by the Canadian government in May 2024 for failing to pay the employee health tax for the fiscal year that concluded on December 31, 2020.
In a regulatory filing, Infosys revealed that on May 9, it obtained the directive from Canada’s Finance Ministry.
Anand Rathi Securities vice-president D.D. Sharma remarked on the previous day’s stock action, saying that Infosys’s results were in line with market expectations and that profit booking was occurring in the company.
Significant declines in the stock prices of other prominent firms in the IT industry, such as Tata Consultancy Services and Satyam Computer Services, have also had an impact.
As we reported earlier, Infosys is currently experiencing difficulties onboarding over 500 freshers, many of whom have been waiting for more than two years, leading to an extraordinary hiring frenzy in 2022.
Due to allegations of tax fraud by their foreign subsidiaries, tax authorities in India are closely examining large infotech services companies. The government is anticipated to send similar notifications to other IT businesses in response to a significant $4 billion tax demand made to Infosys. This blog explores the specifics and possible effects of these tax requests on the IT sector.
