IT services giant Infosys is facing a demand for nearly $4 billion in tax claims from the Indian state of Karnataka, related to spending on its overseas branches.
Infosys faces $4 billion tax claim for services from foreign branches | World Business Watch
On Wednesday, the Bengalaru-based company [PDF] sent a notice to the Bombay Stock Exchange disclosing the matter.
India's media reports that the case involves a customer based outside India, which Infosys served with workers both domestically and elsewhere. Expenses for Infosys' offshore units were included in invoices sent from India, so local authorities believe that Indian sales taxes are therefore due.
Infosys argues that these expenses should not attract Indian sales tax and has cited a government circular to support its position.
