Infosys Limited, the global IT consulting firm, has addressed recent allegations regarding the non-payment of Goods and Service Tax (GST) related to expenses incurred by its overseas branches. In a stock exchange filing on Wednesday, the company reaffirmed its adherence to GST regulations and clarified its payment status.
In response to a pre-show cause notice issued by the Karnataka State GST authorities, Infosys confirmed it had been asked to pay GST amounting to Rs. 32,403 crores for the period from July 2017 to March 2022. Infosys has formally responded to this notice, stating that GST is not applicable to these expenses under current regulations.
Following the initial notice, the company also received a pre-show cause notice from the Director General of GST Intelligence. Infosys is actively responding to this notice as well.
Clarification on GST Applicability
Infosys emphasized that services provided by its overseas branches to the Indian entity are not subject to GST, citing Circular No. 210/4/2024 issued by the Central Board of Indirect Taxes and Customs on June 26, 2024, following recommendations from the GST Council.
The company highlighted that GST payments related to the export of IT services are eligible for credit or refund. Infosys assured stakeholders that it has complied with all central and state GST regulations and has paid all its dues.
Infosys Statement
"The Company would like to clarify on this matter: Karnataka State GST authorities have issued a pre-show cause notice for payment of GST of Rs. 32,403 crores for the period July 2017 to March 2022 towards the expenses incurred by overseas branch offices of Infosys Limited. The Company has responded to the pre-show cause notice."
Infosys reiterated its commitment to regulatory compliance and transparency in its operations.
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