Afcons Infrastructure Limited — Important, 31-12-2024: General Updates

Afcons Infrastructure Limited’s branch office in Mozambique has received a demand notice from the Tax Authority regarding personal income tax on salaries of Indian employees for the financial years 2019 to 2021. The tax demand amounts to 51.09 million MZN (approximately ₹6.93 crores), with an additional penalty of 5 million MZN (around ₹57 lakhs), bringing the total to 56.09 million MZN (approximately ₹7.50 crores). The company contends that the demand is not legally viable and plans to appeal against it. Importantly, the contract with the client, ANE (Ministry of Roads), exempts Afcons from all direct and indirect taxes in Mozambique, suggesting minimal financial impact on operations. This situation warrants monitoring as the company navigates the tax implications while upholding its contractual agreements.