In response to recent media reports, Infosys Ltd. has clarified that there is no tax demand currently raised against the company and that a writ petition challenging the Directorate General of GST Intelligence's (DGGI) show-cause notice is pending before the Karnataka High Court.
The clarification, filed with the stock exchanges on Thursday, addressed reports claiming that the IT services major was facing a Rs 415 crore tax notice over alleged ineligible input tax credit (ITC) refunds. Infosys emphasized that it remains fully compliant with all GST regulations and the matter is sub judice.
According to the company's statement, the DGGI had, in May 2025, sought details regarding GST refunds claimed by Infosys for exports of services. The company said it had submitted all required information and even held discussions with the authorities on the matter.
Subsequently, on July 30, a pre-show cause notice was issued to the company. Infosys requested additional time to file a detailed response and sought further clarifications from the authorities. However, the request for extension was denied and on August 12, the DGGI issued a formal show-cause notice amounting to Rs 414.88 crore, excluding interest and penalties.
The show-cause notice alleged that services rendered by Infosys's overseas branches do not qualify as 'export of services' under GST law, thereby questioning the company's eligibility for refunds claimed on such transactions.
After consulting with external tax advisors and legal experts, Infosys evaluated the notice's merits and subsequently filed a writ petition in the Karnataka High Court on September 19, challenging its validity.
"The company would like to reiterate that it has always been fully compliant with all applicable central and state laws regarding GST refunds," Infosys stated in its filing. It further added that there is "no material impact" of the reported issue on its operations or financial position.
The development comes amid increased scrutiny by the GST intelligence authorities over refund claims by major IT and service exporters. Legal experts note that the case could have broader implications for determining tax treatment of cross-border intra-group services under GST.
Infosys, India's second-largest IT services exporter, continues to maintain that all its GST refund claims are legitimate and backed by appropriate documentation. The High Court's ruling on this matter will likely provide clarity on how such refunds are to be interpreted under the Goods and Services Tax framework.
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