After $4 billion Infosys demand, India may target other IT majors, source says
tax evasion related to work down by their overseas offices, a government source said on Thursday, a day after Infosys was slapped with a $4 billion tax demand.
In serving its highest-ever tax demand on Infosys, the government accused India's second-largest tech services company of evading taxes and sought Rs 32,000 crore ($3.8 billion), or almost all its revenue for the quarter ended June 30.
Infosys said late on Wednesday it had received «pre-show cause» notices from the tax authorities but believed the relevant taxes had been paid. The company said in a statement it had paid its dues and is in compliance with central and state regulations.
Yet tax authorities are not confining their investigations to Infosys. «This is an industry-wide issue,» a senior tax official with knowledge of the matter told Reuters, adding that notices were likely to be sent to some other IT companies.
The source spoke on condition of anonymity as he was not authorised to speak to media.
India's finance ministry did not immediately reply to an email seeking comment.
Experts said more tax notices for the same alleged violations were likely to be in the offing.
«Issuing such a substantial show-cause notice is likely to set a precedent, leading to similar notices being issued to other multinational companies, particularly in the IT sector,» said Rajat Mohan, director at accounting firm MOORE Singhi.
The overseas offices carry out projects for Indian IT firms and provide services to international clients, among other functions.
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