Infosys $4 Billion Tax Demand Likely To Be Withdrawn After Backlash
New Delhi: India is likely to retract its demand that Infosys pay $4 billion in back taxes after weeks of lobbying by the IT giant and an onslaught of criticism from the software services industry, said two government sources with direct knowledge of the plan.
Authorities last month ordered Infosys to pay the additional amount, arguing that its overseas offices should pay goods and services tax (GST) dating back to 2017.
The country's tax investigation unit followed prevailing regulations in sending out the notice to Infosys but the federal finance ministry now believes the notice is against India's broader tax principle of not taxing services exports, one of the sources said.
The sources declined to be identified as a formal decision has yet to be made. India's finance ministry and Infosys did not reply to Reuters requests for comment.
Tax notices worth more than $1 billion combined to 10 foreign airlines operating in India, including Etihad and British Airways, will also likely be made redundant as the issue is similar, said the source.
