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. The company said it has responded to the pre-show cause notice.
The company has also received a pre-show cause notice from Director General of GST Intelligence on the same matter and the company is in the process of responding to the same.
The IT major said it 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 entity are not subject to GST.
"It is also important to note that the GST payments are eligible for credit or refund against export of IT services," Infosys said in a statement on Wednesday.
Infosys said it has paid all its GST dues and is fully in compliance with the central and state regulations on this matter.
Infosys is a global leader in next-generation digital services and consulting. The IT major’s consolidated net profit declined 20.08% to Rs 6,374 crore in Q1 FY25 compared with Rs 7,975 crore in Q4 FY24. Revenue from operations increased 3.67% QoQ to Rs 39,315 crore in Q1 FY25.