Infosys stock fell nearly 1 percent in early trade on 1 August after the IT major received a GST notice citing a massive Rs 32,000 crore tax evasion -- a claim that the company has denied. Infosys shares were trading at Rs 1,850 on the NSE at 9.16 am. The stock extended the previous day's 0.5 percent fall.
Earlier yesterday, Moneycontrol reported that the Directorate General of GST Intelligence has said that Infosys is “liable to pay IGST under reverse charge mechanism on supplies received from branches located outside India to the tune of Rs 32,403.46 crores for the period 2017-18 (July 2017 onwards) to 2021-22.”
Infosys, on its part, said in a stock exchange filing that GST is not applicable on expenses claimed by DGGI, adding that the company has paid all dues and is fully in compliance with the central and state regulations on this matter.
Further, Infosys is also learnt to have clarified that the notice is a pre-show cause notice, and there no demand yet. The company will have to respond to the GST authorities explaining why the demand is not tenable, CNBC TV18 reported citing sources.
Read in detail: Infosys gets GST demand for alleged tax evasion of Rs 32,000 cr, company says it has paid all dues
The huge tax hits Infosys just as the company, and India’s other major IT firms, are showing signs of recovery following a slowdown in discretionary tech spending in key overseas markets.
For context, the sum demanded amounts to more than a full year’s net profit of the company and about a quarter’s worth of revenue. For the Q1 FY25, Infosys reported its net profit rose 7.1 percent on-year to Rs 6,368 crore, with revenue rising 3.6 percent to Rs 39,315 crore. More encouragingly, the company raised its revenue growth guidance for the financial year 2024-25 to 3-4 percent, beating Street expectations.
Infosys share price has gained more than 20 percent since January this year, outperforming benchmark NSE Nifty 50 index, which has risen about 15 percent.
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