The issue surrounding a Goods and Services Tax (GST) demand notice for approximately Rs 32,000 crore against information technology (IT) major Infosys is likely to take longer amid the GST law committee still deliberating its options before any decision can be brought up before the GST Council for its approval.

According to sources familiar with the matter, the GST Council's upcoming meeting on December 21 will not address the relief for Infosys, as the matter is still not on the agenda.

Another source familiar with the discussions indicated that a nuanced clarification to the circular issued on June 26, 2024 (Circular 210), may be considered in a bid to provide relief to Infosys. The circular primarily addresses issues related to the import of services by entities from related persons or their other establishments outside India, where the recipient is eligible for full input tax credit (ITC). However, in the case of Infosys, the company’s overseas branch offices did not meet the criteria for claiming full ITC, which led to complications with the application of the circular.

“Relief to Infosys is likely, though it may take some time,” said a third source.

Infosys, in a filing to the Bombay Stock Exchange (BSE) in July 2024, revealed that Karnataka State GST authorities had issued a pre-show cause notice, demanding Rs 32,403 crore for the period between July 2017 and March 2022, for expenses incurred by its overseas branches. Infosys responded to the notice, and sources indicated that while relief for the company is expected, it may take some time for the issue to be settled.

While Infosys’s case is still under deliberation, the GST Council is set to discuss other significant proposals during its upcoming meeting.

Source: Money Control