Infosys clarified that there are no pending Goods and Services Tax (GST) demands against it regarding ineligible input tax credit (ITC) refunds, according to an exchange filing on Thursday.
The statement comes a day after the Directorate General of GST Intelligence (DGGI) issued a show cause notice to the Indian IT major for Rs 415 crore over alleged ineligible ITC refunds.
The show cause notice issued by DGGI alleged that the services Infosys provided on foreign soil cannot be classified as export of services, and hence does not qualify for ITC refunds. The services in question reportedly involved work performed by overseas branches and subcontractors on client projects abroad.
According to the DGGI's findings, Infosys — whose exports constitute nearly 97% of its total revenue — filed multiple refund claims across several GST registrations for the period. The company declared these supplies as outward taxable supplies (zero-rated) and claimed refunds of accumulated ITC under Rule 89 of the CGST Rules, 2017, read with Section 20 of the IGST Act, 2017.
Under the GST regime, a zero-rated supply refers to goods or services taxed at 0%. Suppliers of zero-rated supplies do not charge GST on outward supplies but can claim a refund of ITC on the amount spent on inputs used to make the supply, effectively making the supply chain tax-free.
According to official documents seen by ET, DGGI's investigation was triggered by intelligence inputs suggesting that Infosys had claimed ineligible refunds of ITC for services that were not actually exported.
DGGI had sought information on the GST refunds claimed by the company in May, which was subsequently provided to the authority. The company also met with DGGI officials regarding this matter, Infosys said.
The GST compliance authority issued a pre-show cause on July 30. Infosys said it had sought additional information and time to file a suitable response to the pre-show cause, which was not provided by DGGI. Instead, a show-cause notice was issued on August 12 for Rs 414.88 crore, excluding interest and penalties, the company added.
"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," the exchange filing read.
Emphasising that it is in compliance with all laws pertaining to GST refunds, Infosys mentioned that the show-cause notice will not have any material impact its business.
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The statement comes a day after the Directorate General of GST Intelligence (DGGI) issued a show cause notice to the Indian IT major for Rs 415 crore over alleged ineligible ITC refunds.
The show cause notice issued by DGGI alleged that the services Infosys provided on foreign soil cannot be classified as export of services, and hence does not qualify for ITC refunds. The services in question reportedly involved work performed by overseas branches and subcontractors on client projects abroad.
According to the DGGI's findings, Infosys — whose exports constitute nearly 97% of its total revenue — filed multiple refund claims across several GST registrations for the period. The company declared these supplies as outward taxable supplies (zero-rated) and claimed refunds of accumulated ITC under Rule 89 of the CGST Rules, 2017, read with Section 20 of the IGST Act, 2017.
Under the GST regime, a zero-rated supply refers to goods or services taxed at 0%. Suppliers of zero-rated supplies do not charge GST on outward supplies but can claim a refund of ITC on the amount spent on inputs used to make the supply, effectively making the supply chain tax-free.
According to official documents seen by ET, DGGI's investigation was triggered by intelligence inputs suggesting that Infosys had claimed ineligible refunds of ITC for services that were not actually exported.
DGGI had sought information on the GST refunds claimed by the company in May, which was subsequently provided to the authority. The company also met with DGGI officials regarding this matter, Infosys said.
The GST compliance authority issued a pre-show cause on July 30. Infosys said it had sought additional information and time to file a suitable response to the pre-show cause, which was not provided by DGGI. Instead, a show-cause notice was issued on August 12 for Rs 414.88 crore, excluding interest and penalties, the company added.
"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," the exchange filing read.
Emphasising that it is in compliance with all laws pertaining to GST refunds, Infosys mentioned that the show-cause notice will not have any material impact its business.
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