The domestic market for IT players has been so weak that any project coming in from the government is a big deal and the tax department has gone all out with this particular software project that they have come out with.
The deal value is pegged at around Rs 200 crore. Term is approximately 5 years, but is likely to be extended further.
Essentially this is to setup and manage a software platform called the ITBA in order to ease tax payers process of tax application, of e-filing etc and also to kind of tighten the noose around tax evasion, etc., which is something that tax department has been focusing on.
Sources say, the difference between Infosys and Tata Consultancy Services (TCS) bid has been quite substantial - indicating that TCS pricing strategy is much ahead of its peers.
There were three players that they were looking at. Tax department was finalizing TCS, Infosys and Wipro. It actually came down to TCS and Infosys and TCS’s bid was around Rs 200 crore, whereas Infosys was around Rs 350-360 crore. This deal will give TCS a big leg up in terms of expanding in this particular area.