Even as the stalemate over the legality of Infosys Technologies? Chandigarh special economic zone (SEZ) campus continues, the country?s second largest IT firm has said it made ?full disclosure of all the building activities on the said land? through the Chandigarh Administration ?in its application to the Central government for SEZ notification.?
In its edition dated March 13, FE had reported that the company could potentially face a tax liability of around Rs 100 crore for alleged violations of SEZ rules. The revenue department in the finance ministry has observed that Infosys converted an existing IT campus?which had ?economic and commercial activity going on? even before the SEZ status was given in June 2006 to illegally avail of tax and duty benefits given under SEZ Act. Rule 7 of SEZ Act requires identified areas to be vacant for SEZ approval.
The department in a series of letters to the commerce ministry has said the campus? SEZ status should be withdrawn and tax and duty benefits should be recovered along with penal action. However, in an email reply to FE, Infosys has said while the board of approval (BOA) approved the IT SEZ under the earlier SEZ Scheme and it got the letter of approval (LOA) in June 2006, it started operation only in September 2006. Infosys also said ministry of commerce examined all the points raised by the customs office in the meeting held on September 25, 2009 and upheld the legality of the formation of SEZ and also noted that all the facts have been disclosed before the BOA before the SEZ was notified and approved.
The department has alleged that ?at every stage there has been misinterpretation of the fact by the developer (Chandigarh Administration), inadequate scrutiny by BOA leading to complete violation of law.? Even as it is alleged that Infosys has availed tax benefit wrongly for building such infrastructure without any approval and has also been availing ineligible tax/duty benefits (including service tax exemption of over Rs 50 lakh) for operation and maintenance, the company said that it did not avail any duty benefit on the building under construction till it got the LOA.
Meanwhile, in a separate statement issued on Monday, the company has also said that it signed a memorandum of understanding (MoU) with the Chandigarh Administration and 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,? it said.
The company also said that the cumulative investment by Infosys in the facility as on December 31, 2009 is Rs 286.85 crore and the total exports out of the facility, ?since the start of operations of our Chandigarh Development Centre on September 4, 2006? till December 31, 2009 is over Rs 750.40 crore.