Four of the top six Indian IT service companies have disclosed that they together have contingent liabilities of around Rs 22,400 crore pertaining to pending and ongoing cases which they are fighting before various courts and tax forums in India.
The tech companies revealed this in compliance with a recent notification from SEBI (Securities and Exchange Board of India) that requires companies to disclose pendency of any litigations or disputes.
While Wipro said that it is litigating before various tax authorities and various courts, the company’s dues as of June 30, 2023 could come up to Rs 9,810 crore if it gets unfavourable verdicts. The company stated that it has deposited about Rs 116 crore to tax authorities under protest.
Infosys said in a filing with BSE that its litigated amount stands at Rs 3,894 crore. Infosys stated: “These claims are on account of multiple issues of disallowances, such as disallowance of profits earned from STP Units and SEZ Units, disallowance of deductions in respect of employment of new employees under Section 80JJAA, disallowance of expenditure towards software being held as capital in nature and payments made to Associated Enterprises held as liable for withholding of taxes.”
Another Bengaluru-based IT firm, LTIMindtree, disclosed in a filing that the quantum of claims it faced was at Rs 5,162 crore. The company stated that the High Court of Karnataka has also granted interim stay on a case related to GST.
Tech Mahindra, the fifth largest IT service company, said that it faced a claim of Rs 3,561 crore from various cases that it is challenging before various forums and courts.