Infosys responds to GST notice, affirms compliance with regulations

Representational Image. Pic Courtesy/iStock

The IT services provider Infosys declared on Wednesday that it has complied with the Karnataka GST authorities' pre-show cause notice and paid all outstanding GST amounts. The notification requested that GST totalling Rs. 32,403 crore be paid for the months of July 2017 through March 2022 in relation to costs incurred by the company's foreign branch offices.

Infosys said in a stock market filing that it believes the present regulations do not apply to these charges in terms of GST. The business underlined that it complies with all applicable federal, state, and local laws, reported ANI.

"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. Subsequent to the publication of the news articles the Company has also received a pre-show cause notice from the Director General of GST Intelligence on the same matter and the Company is in the process of responding to the same," Infosys stated per the news agency report.

According to the report, the corporation also clarified that services rendered by foreign branches to an Indian entity are exempt from GST in accordance with a recent circular from the Central Board of Indirect Taxes and Customs (Circular number 210/4/2024, dated June 26, 2024).

"The Company believes that as per regulations, GST is not applicable on 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 Indian entities are not subject to GST," the statement added.

This statement was made in reaction to news reports that had been released earlier in the day about the non-payment of GST on costs incurred by Infosys's international subsidiaries, the report added.

It further stated that in addition to reassuring that it has paid all of its GST obligations and is in complete compliance with all applicable legislation, Infosys restated that GST payments are eligible for credit or refund against the export of IT services.