Infosys has received a demand for alleged GST evasion of over ₹32,000 crore.

A Moneycontrol report quoting a document of Directorate General of GST Intelligence (DGGI) said: “In lieu of receipt of supplies from overseas branch offices, the company has paid consideration to the branch offices in the form of overseas branch expense.

“Hence, M/s Infosys Ltd, Bengaluru is liable to pay IGST under reverse charge mechanism on supplies received from branches located outside India to the tune of ₹32,403.46 crore for the period 2017-18 (July 2017 onwards) to 2021-22’’.

The reverse charge mechanism (RCM) in GST comes when the recipient of goods or services is liable to pay the tax instead of the supplier.

In a regulatory filing late evening, the country’s second largest IT services firm said that it has received a ‘pre-show cause notice’ for payment of GST of ₹32,403 crore for the period July 2017 to March 2022 from the Karnataka state GST authorities.

Infosys added that this is towards the expenses incurred by overseas branch offices of the company.

“The company has responded to the pre-show cause notice. The company has also received a pre-show cause notice from Director General of GST Intelligence on the same matter and the company is in the process of responding to the same. The company believes that according to the regulations, GST is not applicable on these expenses,’’ it said.

Gadkari plea

Union minister of road transport and highways Nitin Gadkari has urged finance minister Nirmala Sitharaman to remove the 18 per cent goods and services tax (GST) on life and medical insurance premiums as it restricts the growth of the sector.