Nasscom seeks simpler tax compliance for cos
Says multiple cos facing avoidable litigation and uncertainty pertaining to tax issues
image for illustrative purpose
Bengaluru: IT industry body Nasscom on Thursday has sought clarity from the central government on the issue of GST imposition on expenses on overseas branches after Infosys received a tax demand of more than Rs 32,000 crore from tax authorities.
On Wednesday, Infosys received a pre-show cause notice on evasion of GST in lieu of expenses incurred on its overseas branches. This has raised concerns among other IT services players about such demand being imposed on them in the future.
“Nasscom had requested the Ministry of Finance to issue a circular to clarify the position so that the industry can avoid this litigation risk,” the industry body said in a statement. Nasscom further said that this is not a new problem and courts have been ruling in favour of the industry in such cases.
The industry body further said that a circular was issued two months back to address this issue, which stated that the deemed open market value of such transactions would be NIL if full input tax credit is available. Nasscom also pointed out that the issue of tax imposition on overseas branches had been addressed by earlier service tax era.
