Report: India Could Issue Tax Notices to Additional IT Firms Following $4 Billion Demand on Infosys
In the wake of a historic $4 billion tax demand issued to Infosys, India’s government is reportedly preparing to send tax notices to additional major IT firms. The move comes amid allegations of tax evasion related to services provided by the overseas offices of these companies.
In the wake of a historic $4 billion tax demand issued to Infosys, India’s government is reportedly preparing to send tax notices to additional major IT firms. The move comes amid allegations of tax evasion related to services provided by the overseas offices of these companies.
Infosys, India’s second-largest tech services company, has been served with the largest tax demand in the country’s history. The government accuses Infosys of evading taxes on services rendered by its international branches and has demanded ₹320 billion, which nearly matches the company’s revenue for the quarter ending June 30.
A senior tax official, speaking on the condition of anonymity, indicated that this issue might affect other IT companies as well. “This is an industry-wide issue,” the official told Reuters, suggesting that similar tax notices could soon be issued to other firms in the sector. The Finance Ministry has yet to respond to inquiries regarding this matter.
Experts anticipate that the substantial tax demand on Infosys could set a precedent for future actions. Rajat Mohan, director at accounting firm MOORE Singhi, noted, “Issuing such a substantial show-cause notice is likely to lead to similar notices being sent to other multinational companies, especially within the IT sector.”
The scrutiny focuses on the overseas offices of IT firms, which undertake various projects and provide services to international clients. These offices have been implicated in the alleged tax evasion, prompting the government to review their tax compliance.
As the situation unfolds, industry observers are closely watching for additional developments, including the potential impact on other IT companies and the broader implications for the sector’s regulatory environment.
Sources By Agencies
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