CBIC

Global Business, Local Tax: The Infosys GST Controversy and its Wider Implications

In an increasingly globalised economy, business activities extend beyond physical borders and traverse geographical boundaries, leading to varied tax implications due to outdated tax legislations that do not fully address these changes. In the service sector, tax obligations can arise even without traveling to different countries. A case in point is the recent incident of the revenue serving Infosys with a INR 32,403 crore (US$ 3.8 Billion) pre-show cause notice, which was later transferred to the Directorate General of GST Intelligence (“DGGI”) for further investigation. Prima facie, the tax assessment seemed not only excessive but also conceptually flawed, as it exceeded the annual profit declared by Infosys. The DGGI later withdrew the said notice. While the dust has settled on this high-stakes incident, the lessons may reverberate across India, particularly for multinational service providers. The questions raised during the investigation will have lasting significance and warrant consideration, extending beyond a single company or tax notice.Continue Reading Global Business, Local Tax: The Infosys GST Controversy and its Wider Implications

Customs Act

In a recent decision involving Canon India, the Hon’ble Supreme Court (“SC”) had adjudicated about the authority of the officers of Directorate of Revenue Intelligence (“DRI”) to issue a show cause notice (“SCN”) under Section 28 of the Customs Act, 1962 (“Customs Act”) for the recovery of short payment of customs duty.[1] The Hon’ble SC held that a DRI officer does not have the authority to initiate proceedings through SCN issuances, since such an officer was not the person to clear the goods initially.Continue Reading Who is proper officer for customs? The argument continues!

With the decision in Sh. Rishi Gupta v. M/s Flipkart Internet Pvt. Ltd.[1], the National Anti-profiteering Authority (NAA) has shifted the focus from the Fast Moving Consumer Goods (FMCG) sector to the e-commerce sector.

In this case, the applicant alleged that the excess amount charged at the time of placing the order should be refunded to him, given that the rate of Goods and Services Tax (GST) reduced from 28% to 18%, between the date of placing the order and the date of supply. It was further alleged that the respondent, i.e. Flipkart, was resorting to profiteering in contravention of the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 (CGST Act), by not refunding the differential amount.
Continue Reading Anti-Profiteering Orders – A Right Step Forward? Part II