In a big relief for Infosys, the GST department has closed a huge tax matter worth Rs 32,403 crore. The issue was related to services that Infosys took from its overseas offices between July 2017 and March 2022.
This amount was mentioned in a "pre-show cause notice" sent by the Director General of GST Intelligence (DGGI). A pre-show cause notice is a warning given before a full legal notice. The tax officials believed Infosys should have paid GST under the Reverse Charge Mechanism on services from its own overseas branches.
Last year in July, Infosys had informed that it got this notice from Karnataka GST officials. The company said it disagreed with the notice and explained its side to the authorities.
Infosys said that as per GST rules, services from its own overseas offices are not counted as "imported services" and therefore do not attract GST. Also, the GST Council and the Central Board of Indirect Taxes and Customs (CBIC) had later clarified that such services are not taxable.
In a filing to the stock exchange (BSE), Infosys said it got a communication from DGGI confirming the closure of the case for financial years 2018-19 to 2021-22. Earlier, in August 2024, the department had already closed the matter for 2017-18. Now, with this latest letter, the entire matter stands closed.
The Rs 32,403 crore demand was actually more than the company’s annual profit. Infosys earned a net profit of Rs 26,713 crore in FY25. So, this closure gives big relief to the company and its investors.
Infosys said it has always followed all GST rules properly and paid all dues on time. It also said it is fully compliant with both state and central tax laws.
For the March 2025 quarter, Infosys reported a profit of Rs 7,033 crore, which was lower than before. It blamed employee expenses and acquisitions. The company expects 0–3% revenue growth this year due to global uncertainty.
(With agency inputs)
