Infosys could post Rs. 400 crore incremental revenue over the last two quarters of 2016 as part of the Rs. 1380 crore Goods and Services Tax Network (GSTN) deal won by the company in September 2015. According to sources, the Bangalore-based IT major has started to import and install the required hardware required for the project. The GST, which is the non-profit entity owned by the Central and state governments will provide the required funding for the purchase of the required hardware.
According to sources, the payment of Rs. 400 crore will be based on various milestones set as per the agreement. Commenting on the development, GSTN Chairman Navin Kumar revealed that payment for the hardware will be done between October and March depending on how the work progresses.
Infosys lowered revenue guidance
Infosys had lowered revenue guidance to 10.5 to 12 percent because of the cancellation of Royal Bank of Scotland contract. Hence, the hardware cost will reportedly come down. Talking about the earned profit in dollar terms, the company posted a 4.1 percent sequential decline in net profit for the Q2 2016.
One percent revenue growth expected
If Infosys manages to get Rs. 400 crore payment, it could lead to one percent growth in revenue in the upcoming quarters. According to industry analysts, this is seen as an added advantage during a lean season. This is because technology companies often view the substantial growth in a slump because of the holiday season.
Commenting on the development, an Infosys spokesperson disclosed that the company is excited to be part of the GST journey. They are working in close contact with GSTN and other state government agencies in such a way to implement the system in a timely manner.
In the meantime, GSTN Chairman Navin Kumar disclosed to a leading newspaper that government expects the beta version of the tax portal to be rolled out in February 2017. It remains to be seen as to how the respective state government responds to the system developed by Infosys.