Bangalore: Infosys Technologies CEO S 'Kris' Gopalakrishnan said that the company "has never evaded any taxes nor will it ever evade any taxes in the future." He replied this to a news item -titled 'Infosys faces evasion charges' - that appeared in Financial Express on March 13, reports Rediff.
Financial Express had reported on March 13 that Infosys, India's second largest IT company, could 'potentially face a tax liability of Rs. 100 crore (Rs. 1 billion) for alleged violations of special economic zones rules at its Chandigarh SEZ'. "First of all, as one of the most respected and ethical Indian companies, Infosys has never in the past intended to evade taxes and never in the future will intend to evade taxes and duties. In fact, Infosys chairman, N R Narayana Murthy - has been the only business leader who has argued publicly for abolition of all tax exemptions to software and BPO companies," Gopalakrishnan said in a media statement.
Financial Express had reported on March 13 that Infosys, India's second largest IT company, could 'potentially face a tax liability of Rs. 100 crore (Rs. 1 billion) for alleged violations of special economic zones rules at its Chandigarh SEZ'. "First of all, as one of the most respected and ethical Indian companies, Infosys has never in the past intended to evade taxes and never in the future will intend to evade taxes and duties. In fact, Infosys chairman, N R Narayana Murthy - has been the only business leader who has argued publicly for abolition of all tax exemptions to software and BPO companies," Gopalakrishnan said in a media statement.
According to the Infosys statement, the company "was the first software company to be invited by the Chandigarh administration to start a development centre at Rajiv Gandhi Chandigarh Technology Park (being created as a Special Economic Zone or SEZ) for creation of employment for the young men and women of Chandigarh. Infosys accepted the offer and signed a memorandum of understanding with the Chandigarh administration on November 15, 2002."
"As per this MoU, Infosys was allotted 20 acres of land on June 11, 2004. The remaining 10 acres were allotted on November 10, 2005. No sale deed was signed for both the allotments," the statement said.
"As a company focussed on speed, Infosys submitted the development centre building plans and documents for sanction with the Chandigarh administration on July 7 and on July 19, 2004. Land excavation permission was given on July 20, 2004," Gopalakrishnan said in the statement.
"As the developer of the SEZ, the Chandigarh administration made an application on November 30, 2004 to the ministry of commerce to notify 111 acres of the Rajiv Gandhi Chandigarh Technology Park as SEZ," the statement added.
"The Chandigarh administration disclosed in the application the fact that Infosys was proposing to start the construction of the building on the land applied to be declared as SEZ. The actual construction of Infosys development center was started on December 27, 2004," Gopalakrishnan added.
"This is as per the 3.1.1 guidelines of SEZ -- issued by the ministry of commerce on January 21, 2002. The government of India gave the formal approval for the RGCTP to operate as a SEZ on June 6, 2005. This approval was under the old SEZ scheme. New Act and Rules came in to force from February 10, 2006," Gopalakrishnan further stated.
"As the RGCTP SEZ did not start functioning before the new SEZ Act and rule set came in to force on February 10, 2006, the Board of Approval of the government of India (GOI), after consideration of all the facts put forward by the Chandigarh administration, accorded the approval of RGCTP SEZ on May 19, 2006. The issue of vacant land at the time of submitting the SEZ application by the Chandigarh administration was considered by the BOA and the notification was issued only after the site inspection by the Development Commissioner of GOI at Noida," the Infosys statement said.
"Infosys submitted an application to the Development Commissioner Noida on May 24, 2006 for setting up an IT SEZ unit in RGCTP. Infosys received the approval for setting up an IT SEZ unit in RGCTP from the Government of India on June 16, 2006," the statement further said.
"Infosys did not avail any customs / excise duty / tax exemption on the construction activities till it got the Letter of Approval from the ministry of commerce on June 16, 2006. Infosys started the operation of its development center at RGCTP from September 4, 2006," the Infosys CEO said in the statement.
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