DGGI Karnataka Withdraws GST Demand Worth INR 32,400 Cr from Infosys

The Karnataka State authorities have taken a positive step by withdrawing the hefty Rs 32,400 crore Goods and Services Tax (GST) demand on Infosys. This decision comes after the company received a communication from the authorities directing them to respond to the Directorate General of GST Intelligence (DGGI) central authority on this matter.

Backtracking on the Demand

The regulatory filing from Infosys revealed that the pre-show cause notice has been withdrawn by the Karnataka State authorities. This notice was initially sent by the DGGI on July 30 for non-payment of Integrated Goods and Services Tax (IGST) on import services.

Industry and Tax Expert Concerns

The industry and tax experts criticized DGGI’s action and demanded clarification from the Union finance ministry. Nasscom, the tech industry body, raised concerns over the lack of understanding of the industry’s operating model behind the hefty GST demand notice.

Applicability of GST

The issue at hand revolved around the applicability of GST through the Reverse Charge Mechanism (RCM). There have been instances of notices issued for payment by Indian head offices before their foreign branches, even in cases where no service is provided between the two entities.

#DGGIWithdrawsDemand #Infosys #GSTUpdate #Nasscom #RCMConcerns #TaxationIssues