A GST demand notice of Rs 32,403 crore has put Infosys shares under scrutiny.
Infosys Ltd. shares are in the spotlight today after the second-largest domestic IT firm received a pre-show cause notice from Karnataka State GST authorities for a GST payment of Rs 32,403 crore for costs spent by Infosys’ international branch offices between July 2017 and March 2022.
In stock market filings, Infosys stated that it has reacted to the pre-show cause notice. “Subsequent to the publication of the news articles, the company has also received a pre-show cause notice from the Director General of GST Intelligence on the same matter, and the company is in the process of responding to the same,” Infosys said.
Infosys stated that it feels GST is not relevant to expenditures spent by international branch offices. Furthermore, according to a recent circular issued by the Central Board of Indirect Taxes and Customs in response to the GST Council’s recommendations, services given by foreign branches to Indian entities are exempt from GST, according to the Salil Parekh-led organization.
Infosys stated that GST payments are eligible for credit or refund against the export of IT services and that it has paid all GST dues and is completely compliant with national and state rules on the subject.
Infosys shares have risen 17.5% in the last month. They are up 37% in the past year.The IT business posted better-than-expected first-quarter performance. With robust growth, upbeat comments, and an updated forecast, analysts predict that the IT major’s value gap with Tata Consultancy Services Ltd. (TCS) will close in the coming quarters. They recommended ‘Buy’ on the company, noting a solid rebound and an excellent dividend yield of more than three percent.
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