Infosys Faces Pre-Show Cause Notice for Alleged GST Evasion of Rs 32,403 Crore

India's IT giant Infosys has received a pre-show cause notice for alleged GST evasion totaling Rs 32,403 crore between July 2017 and March 2022. The company disputes the claim, citing regulations and a recent circular that exempts GST on expenses incurred by overseas branches when providing services to the Indian entity.

India's second-largest IT services company, Infosys, has been issued a 'pre-show cause' notice for alleged GST evasion amounting to approximately Rs 32,403 crore.

In a filing with the Bombay Stock Exchange (BSE), the Bengaluru-based IT firm revealed that the Karnataka State GST authorities have called for the payment of GST for the period from July 2017 to March 2022. This notice pertains to the expenses incurred by Infosys' overseas branch offices. The company has responded to the notice.

Additionally, Infosys has also received a pre-show cause notice from the Director General of GST Intelligence on the same issue and says it is in the process of responding to it as well. Infosys maintains that according to current regulations, GST does not apply to such expenses. The company further pointed to a recent circular issued by the Central Board of Indirect Taxes and Customs based on GST Council recommendations, which clarifies that services provided by overseas branches to the Indian entity are exempt from GST.

Infosys argues that GST payments are eligible for credit or refund against the export of IT services. The company affirmed that it has paid all its GST dues and is fully compliant with central and state regulations on the matter.