Karnataka Authorities Withdraw Rs 32,403 Crore GST Demand Against Infosys

Infosys says that the Karnataka State authorities are withdrawing the pre-show cause GST notice issued to Infosys with a tax demand of Rs 32,403 crore, the company informed the exchange in a filing on Friday.

“The Company has received a communication from Karnataka State authorities, withdrawing the pre-show cause notice and has directed the Company to submit a further response to DGGI central authority on this matter,” said Infosys.

Earlier on Wednesday, the Karnataka State GST authorities issued a pre-show cause notice to Infosys 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 responded to the pre-show cause notice and stated that the Company believes that as per regulations, GST is not applicable to these expenses. “Additionally, as per a recent Circular (circular number 210/4/2024 dated June 26, 2024) 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,” said the company.

The clarification from Infosys came after news articles were published on Wednesday regarding the non-payment of GST towards expenses incurred by the overseas branches of the Company.

Infosys said GST payments are eligible for credit or refund. “Infosys has paid all its GST dues and is fully in compliance with the central and state regulations on this matter,” the statement said.

(With ANI Inputs)

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