Why has Canada fined Infosys Rs. 82 lakhs?


Canada fined Infosys:

The Canadian government imposed a penalty of about 1.34 lakh Canadian dollars (roughly ₹82 lakh) on IT firm Infosys for allegedly underpaying employee health tax for the fiscal year ending 31 December 2020, according to a regulatory filing. On May 9, Infosys got a directive from the Canadian Finance Ministry.

The statement stated, “Penalty imposed on alleged underpayment of Employee Health Tax for the year ended 31 December, 2020,” and showed that a penalty of 1,34,822.38 Canadian dollars was imposed on the company, according to news agency PTI. Infosys stated that this issue has no substantial impact on its finances, operations, or other activities.


In Canada, the Employee Health Tax (EHT) is a mandatory payroll tax levied on businesses in certain jurisdictions, including Ontario and British Columbia. This tax is calculated using a variety of employee compensations, including salary, bonuses, taxable perks, and stock options. Its primary goal is to contribute to the financing of healthcare services within the province.

Infosys in Canada.

Infosys has a major presence in Canada, with multiple offices spread around the country. Offices are located in Alberta, Mississauga, Ontario, Burnaby, British Columbia, and Ottawa, Ontario.

“Infosys is committed to expanding in Canada, doubling its national job commitment to 8,000 by 2024.” This aligns with Infosys’ objective of developing the next generation of innovators locally for an increasingly digital future. Every day, Infosys helps Canadian organizations use disruptive digital technologies, empower employees via learning and upskilling, and become more competitive, according to the company’s website.

The website also claims that the company has “created over 5,500 jobs across Toronto, Vancouver, Ottawa, and Montreal, with plans for further expansion across the country.” We look at historical instances involving Infosys: In January, the US tax government fined Infosys $225 for allegedly failing to pay the entire amount owed for “short payment of modified business tax” over two consecutive quarters. “Short payment” refers to payment that is less than the amount invoiced. Similarly, in August 2023, the Florida Department of Revenue assessed $76.92 penalty on Infosys for failing to meet tax payment commitments.

In October, the Commonwealth of Massachusetts fined Infosys $1,101.96 for rejecting family and medical paid leave returns for the first and second quarters of 2023.

In April, the IT services company announced that the Odisha GST authorities had slapped a Rs 1.46 lakh penalty on it for claiming invalid input tax credit. Infosys reported that it received the order on April 22, 2024, from the Assistant Commissioner of State, Odisha (GST), for the payment of a penalty of Rs 1,46,873. The penalty was levied for claiming ineligible Input Tax Credit for the fiscal year 2018-19, according to the filing.

On October 31, 2013, the US Department of Justice reached $34 million settlement with Infosys, the biggest fine ever in an immigration case. The accusation claimed that Infosys engaged in “systemic visa fraud and abuse of immigration processes.” Specifically, it was accused of abusing the B-1 business visiting visa program by bringing foreign national employees into the United States to undertake work that was not authorized under this classification. Infosys was also accused of violating restrictions governing the employment of work-authorized H1-B visa holders. Infosys’ current market status On May 15, at 1:34 pm, Infosys shares were trading down 0.09 percent at ₹1,423.50 on the BSE. The company has market capitalization of ₹5,90,097.73 crore according to BSE.

On April 18, Infosys reported a net profit of ₹7,975 crore for the March quarter, with total revenues hitting ₹37,923 crore. The company stated that its year-on-year revenues in constant currency terms remained flat, with a sequential fall of 2.2%.

For FY25, Infosys expects revenue growth of 1-3 percent in constant currency terms, with an operating margin of 20-22 percent. Despite D-Street analysts’ projections of a lackluster fourth quarter due to a drop in discretionary expenditure, the IT giant has a solid sales pipeline, according to HT’s Mint. However, deal closures have been hampered by longer decision-making processes and the impact of furloughs.

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