Infosys denies it owes $4B in taxes to India
(2024/08/01)
- Reference: 1722485993
- News link: https://www.theregister.co.uk/2024/08/01/infosys_india_tax_dispute/
- Source link:
IT services giant Infosys is facing a demand for almost $4 billion in tax demand from Indian state of Karnataka, relating to expenses incurred by its overseas branches.
On Wednesday, the Bengalaru-based business [1]filed [PDF] a notice with the Bombay Stock Exchange disclosing the matter.
India media [2]report that the matter concerns a client based outside India, which Infosys served with workers both within its home nation and elsewhere. Expenses incurred by Infosys's offshore entities were included in invoices sent from India, so local authorities feel that Indian sales taxes are therefore due.
[3]
Infosys argues those expenses should not attract Indian sales tax and has cited a government [4]circular to back its position.
[5]
[6]
The filing argues it is "fully in compliance with the central and state regulations on this matter."
[7]Infosys CEO to pay a whole $30K in penance for non-disclosure that enabled insider trading
[8]Infosys president leaves to join rival Tech Mahindra as CEO
[9]India ditches its 'Google Tax' after US waved a big stick
[10]Infosys celebrates first birthday of glitchy Indian tax portal by fixing another bug
The circular in question is not a new policy, but rather reads as a "clarification" on the valuation of imported services.
India's Goods and Services Tax (GST) was implemented in 2017. This case represents one of the largest related cases since its debut, according to [11]local media .
If found in the wrong, Infosys is [12]reportedly in line for a fine worth around one year's profit and a quarter worth of revenue.
[13]
Commentators on social media have [14]pointed out the irony that the same outfit that manages India's income tax portal is under investigation for tax evasion.
That tax portal was not Infosys's finest hour. Launched in 2021 and intended to streamline tax filing and compliance processes, it quickly faced criticism for [15]frequent glitches , user interface problems, and slow processing times.
The portal’s debut was so badly [16]botched that India's government reverted to manual tax filings within a week. ®
Get our [17]Tech Resources
[1] https://www.bseindia.com/xml-data/corpfiling/AttachLive/796e6eaa-ecb4-44d6-afa1-a8134651dfe9.pdf
[2] https://www.moneycontrol.com/technology/infosys-gets-gst-demand-for-alleged-tax-evasion-of-rs-32000-cr-company-says-it-has-paid-all-dues-article-12783619.html
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://taxinformation.cbic.gov.in/view-pdf/1003211/ENG/Circulars
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2024/06/28/infosys_ceo_fined_sebi/
[8] https://www.theregister.com/2023/03/12/asia_tech_news_roundup/
[9] https://www.theregister.com/2024/07/25/india_eliminates_google_tax/
[10] https://www.theregister.com/2022/06/09/infosys_tax_portal_search_bug/
[11] https://www.livemint.com/companies/news/infosys-under-dggis-scanner-for-alleged-gst-evasion-of-over-rs-32-000-crore-report/amp-11722435153161.html
[12] https://www.moneycontrol.com/technology/infosys-gets-gst-demand-for-alleged-tax-evasion-of-rs-32000-cr-company-says-it-has-paid-all-dues-article-12783619.html
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://x.com/aviralbhat/status/1818655770944180504
[15] https://www.theregister.com/2022/06/09/infosys_tax_portal_search_bug/
[16] https://www.theregister.com/2021/06/15/india_etax_portal_fail/
[17] https://whitepapers.theregister.com/
On Wednesday, the Bengalaru-based business [1]filed [PDF] a notice with the Bombay Stock Exchange disclosing the matter.
India media [2]report that the matter concerns a client based outside India, which Infosys served with workers both within its home nation and elsewhere. Expenses incurred by Infosys's offshore entities were included in invoices sent from India, so local authorities feel that Indian sales taxes are therefore due.
[3]
Infosys argues those expenses should not attract Indian sales tax and has cited a government [4]circular to back its position.
[5]
[6]
The filing argues it is "fully in compliance with the central and state regulations on this matter."
[7]Infosys CEO to pay a whole $30K in penance for non-disclosure that enabled insider trading
[8]Infosys president leaves to join rival Tech Mahindra as CEO
[9]India ditches its 'Google Tax' after US waved a big stick
[10]Infosys celebrates first birthday of glitchy Indian tax portal by fixing another bug
The circular in question is not a new policy, but rather reads as a "clarification" on the valuation of imported services.
India's Goods and Services Tax (GST) was implemented in 2017. This case represents one of the largest related cases since its debut, according to [11]local media .
If found in the wrong, Infosys is [12]reportedly in line for a fine worth around one year's profit and a quarter worth of revenue.
[13]
Commentators on social media have [14]pointed out the irony that the same outfit that manages India's income tax portal is under investigation for tax evasion.
That tax portal was not Infosys's finest hour. Launched in 2021 and intended to streamline tax filing and compliance processes, it quickly faced criticism for [15]frequent glitches , user interface problems, and slow processing times.
The portal’s debut was so badly [16]botched that India's government reverted to manual tax filings within a week. ®
Get our [17]Tech Resources
[1] https://www.bseindia.com/xml-data/corpfiling/AttachLive/796e6eaa-ecb4-44d6-afa1-a8134651dfe9.pdf
[2] https://www.moneycontrol.com/technology/infosys-gets-gst-demand-for-alleged-tax-evasion-of-rs-32000-cr-company-says-it-has-paid-all-dues-article-12783619.html
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://taxinformation.cbic.gov.in/view-pdf/1003211/ENG/Circulars
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2024/06/28/infosys_ceo_fined_sebi/
[8] https://www.theregister.com/2023/03/12/asia_tech_news_roundup/
[9] https://www.theregister.com/2024/07/25/india_eliminates_google_tax/
[10] https://www.theregister.com/2022/06/09/infosys_tax_portal_search_bug/
[11] https://www.livemint.com/companies/news/infosys-under-dggis-scanner-for-alleged-gst-evasion-of-over-rs-32-000-crore-report/amp-11722435153161.html
[12] https://www.moneycontrol.com/technology/infosys-gets-gst-demand-for-alleged-tax-evasion-of-rs-32000-cr-company-says-it-has-paid-all-dues-article-12783619.html
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZqtcyCqe2isTVX76iqm@hAAAAFU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://x.com/aviralbhat/status/1818655770944180504
[15] https://www.theregister.com/2022/06/09/infosys_tax_portal_search_bug/
[16] https://www.theregister.com/2021/06/15/india_etax_portal_fail/
[17] https://whitepapers.theregister.com/
Re: "a fine worth around one year's profit"
Ali Dodd
Think it's all their non-india clients so a total of 4billion is tax. It's a interesting test case because are they paying tax of those earnings in the country they are billed in - if not then sure India should charge it. If they are then in theory no. However that's the slight absurdity of international tax that allows companies to get away with paying a pittance anywhere, like Vodaphone using Luxembourg for tax purposes despite earning a huge profit in the uk for uk services (think they still do that?). Tired of this corporate(and billionaire) tax evasion bull, if you charge for work in a country, pay tax in that country as you are making money due to that state so should have to contribute to the running of that country - do not care if you are headquartered on the moon. The fact is if you earn from a country you should pay towards that country, same goes for if you live in a country or have citizenship of it you should support it and pay taxes.
Re: "a fine worth around one year's profit"
Anonymous Coward
Probably Rishi Sunak's wife.
If only they had done a better job
ComputerSays_noAbsolutelyNo
If the tax portal had worked fine for everyone else, then it would still be in place.
And, if tax accounting goes through your system, who's to notice you owe taxes?
"a fine worth around one year's profit"
You can bet that Infosys is going to fight this one tooth and nail.
I wonder who it was that Infosys was offshoring to, tu the tune of $4 billion in taxes alone. That's one hell of an offshore service contract.