LTIMindtree Ltd. has received a demand notice of Rs 62.4 crore from the Department of Goods and Services Tax, Mumbai, for denial of zero-rated supply provision, according to an exchange filing on Tuesday. Zero-rated supply is a term used in the goods and services tax regime to describe a supply of goods or services that are subject to nil GST. This means that the supplier does not have to charge any GST on the supply.
The company received the notice on Monday for the period of the financial year 2019–20. "The company has received an Order u/s Section 73 of the Maharashtra Goods & Services Tax Act, 2017 raising a tax demand amounting to Rs 624 million (including penalty of Rs 30 million and interest as applicable) for FY 2019–20," it said.
LTIMindtree is being charged for "denial of zero-rated supply, thereby leading to a proportionate reversal of input tax credit."
Based on the assessment of facts and prevailing law, the company is of the view that the GST demand, including penalty and interest, is unjustified, LTIMindtree said. "The company will take an appropriate legal course against the said order in consultation with its advisors. Accordingly, there is no likely material impact on the company's financials or operations due to the said order," it added.
In the recent past, Infosys came under the radar of the DGGI for alleged evasion of the integrated GST amounting to Rs 32,403 crore. Karnataka's GST department had withdrawn the pre-show cause notice issued to the company while the DGGI investigation continued. However, later, the tax authority closed the pre-show cause notice proceedings for FY18.
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