LTIMindtree Receives Rs 62 Cr GST Demand

Mid-tier IT company LTIMindtree has been hit with a GST demand notice of Rs 62.4 crore by the Department of Goods and Services Tax in Mumbai. The notice pertains to the financial year 2019–20 and includes a penalty of Rs 3 crore along with applicable interest. 

The demand comes from allegations that the company incorrectly handled zero-rated supply provisions, leading to a proportionate reversal of input tax credit.

“The Company has received an Order u/s Section 73 of the Maharashtra Goods & Services Tax Act, 2017 raising a tax demand amounting to INR 624 million (including penalty of INR 30 million and interest as applicable) for FY 2019-20,” said LTIMindtree in a regulatory filing.

The company said that the GST demand, including the penalty and interest, is unjustified. LTIMindtree has stated its intention to challenge the order through appropriate legal channels in consultation with its advisors. The company maintains that the demand is unlikely to have a significant impact on its financials or operations.

This situation follows a recent case involving Infosys, which was investigated by the Directorate General of GST Intelligence (DGGI) for alleged evasion of integrated GST amounting to Rs 32,403 crore. Although the Karnataka GST department withdrew its pre-show cause notice, the DGGI investigation continued before closing the pre-show cause notice proceedings for FY18.