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  1. Infosys clarifies ₹415-crore GST show cause notice, says no tax demand against company

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Infosys clarifies ₹415-crore GST show cause notice, says no tax demand against company

Upstox

2 min read | Updated on October 09, 2025, 12:04 IST

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SUMMARY

Infosys Ltd clarified that there is no tax demand against the company following a show cause notice issued by the Directorate General of GST Intelligence (DGGI) alleging wrongful input tax credit (ITC) refunds worth ₹414.88 crore.

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The IT services firm has challenged the notice in the Karnataka High Court, asserting full compliance with applicable tax laws.

Infosys Ltd on Thursday clarified that there is no tax demand against the company in connection with a show cause notice issued by the Directorate General of GST Intelligence (DGGI) alleging wrongful input tax credit (ITC) refunds worth ₹414.88 crore.

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In a regulatory filing, the country’s second-largest IT services firm said it has challenged the legitimacy of the notice in the Karnataka High Court and reiterated that it has been fully compliant with all applicable laws.

According to Infosys, DGGI had in May 2025 sought information regarding GST refunds claimed by Infosys, which it duly provided. The authority later issued a pre-show cause notice on July 30, and a formal show cause notice on August 12, after denying the company’s request for additional time to respond.

“As per the show cause notice from DGGI, the services provided by the company’s overseas branches are not export of services and hence the refund claimed by the company is allegedly erroneous,” Infosys said.

“The company has assessed the merits of the show cause notice and also sought advice from external tax consultants and legal counsels. Pursuant to the advice, the company has on September 19, 2025, filed a writ petition in the Hon’ble High Court of Karnataka challenging the legitimacy of the show cause notice,” it added.

According to a report by The Economic Times, the DGGI notice pertains to alleged ineligible ITC refunds claimed on export of services between 2018-19 and 2023-24. The probe was triggered by intelligence suggesting that Infosys had included services rendered by its overseas branches and subcontractors as part of its zero-rated export turnover.

Exports account for nearly 97% of Infosys’ total revenue, and the DGGI’s findings indicate that the company had filed multiple refund claims across several GST registrations, the report said.

Infosys said the notice has no material impact on its operations or financials and that it continues to comply with all central and state regulations.

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Upstox
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