Updated 7 June 2025 at 13:55 IST
Big Relief to Infosys As Rs 32,000 Crore Tax Demand Stands Closed: All You Need To Know
Infosys gets a major relief as the Rs 32,000 crore tax demand is officially closed. Here’s what happened and what it means for the company’s future.
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Infosys
Infosys, which is India's second largest software exporter, could potentially face a large tax liability as the Directorate General of GST Intelligence (DGGI) has issued a tax demand worth Rs 32,000 crore on account of tax evasion.
What Did Infosys Say On The Matter?
"In continuation to our earlier communications on July 31, 2024, August 1, 2024 and August 3,2024 on GST, this is to inform that the Company has today received a communication from the Director General of GST Intelligence (‘DGGI’) closing the pre-show cause notice proceedings for the financial years 2018-19 to 2021-22," the company informed on Friday in a stock exchange filing.
This is regarding the "non-payment of IGST under Reverse Charge Mechanism".
According to the company, the GST amount as per the pre-show cause notice for this
period was Rs 32,403 crore and the firm had on August 3, 3034, received a communication from DGGI closing the pre-show cause notice proceedings for the financial year 2017-2018.
"With the receipt of today’s communication from DGGI, this matter stands closed," Infosys added in its statement.
This means that the tax demand has been closed and this is a huge relief to the software exporter.
What Was The Tax Demand About?
GST authorities had issued a Rs 32,403 crore notice to Infosys for services provided by the company's international operations during a five year period starting from 2017.
The company believed that GST was not applicable on the expenses in question, it notified in a stock exchange filing in July 2024.
In 2024, Infosys also said that as per a circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, services provided by the overseas branches to Indian entity are not subject to GST.
The IT major argued that GST payments are eligible for credit or refund against export of IT services.
Published 7 June 2025 at 13:55 IST