Karnataka Withdraws Rs 32,403 Crore GST Notice Against Infosys

The Karnataka State authorities have retracted a Rs 32,403 crore GST notice issued to Infosys. The company clarified the tax demand, referencing a recent circular that exempts such services from GST. Infosys confirms compliance with all tax regulations.

The Karnataka State authorities have withdrawn a pre-show cause GST notice issued to Infosys, which demanded a tax payment of Rs 32,403 crore. The announcement was made by Infosys in a filing on Friday.

Infosys revealed that the communication from the Karnataka State authorities directs the company to submit a further response to the Directorate General of GST Intelligence central authority on the matter.

The notice had been initially issued on Wednesday for GST payment covering the period from July 2017 to March 2022, concerning expenses incurred by Infosys's overseas branches. In its response, Infosys stated that GST is not applicable on such expenses as per regulations. The company also cited a recent circular from the Central Board of Indirect Taxes and Customs, which clarified that services provided by overseas branches to Indian entities are exempt from GST.

Infosys's latest statement was a response to news articles suggesting non-payment of GST for the company’s overseas branch expenses. The company reassured that it has paid all its GST dues and remains in full compliance with both central and state regulations.