Infosys Gets Relief in ₹32,000 Crore GST Case

2 Aug 2024 , 12:30 PM

In a partial relief for Infosys Limited, the information technology major announced that Karnataka state authorities have withdrawn the pre-show cause notice for the GST payment of ₹32,403 crore. However, the company has been directed to submit a further response to the Directorate General of Goods and Services Tax Intelligence (DGGI) on the issue, Infosys said.
Earlier, the company had informed exchanges that it received a notice for payment of GST related to expenses incurred by its overseas branches from July 2017 to March 2022.
“The company believes that as per regulations, GST is not applicable on these expenses,” India’s second-largest software services provider had said. Additionally, as per a recent circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, services provided by the overseas branches to the Indian entity are not subject to GST, the company had said.
The company had claimed that GST payments are eligible for credit or refund against the export of IT services and that it has paid all its GST dues.
Infosys earns a significant portion of its revenue from the export of services to overseas clients. This is the same model that most large IT companies in India follow. Hence, the notice had led to fears of contagion affecting other IT services companies as well.