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2mo ago

DGGI Closes ₹32,403 Crore GST Demand Against Infosys

Infosys won relief after the GST Council clarified that services from its foreign branches are not taxable under the reverse charge mechanism.

Infosys Q4 results out | Image: Infosys
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Overview

  • Infosys received a pre-show cause notice from the DGGI in July 2024 over alleged non-payment of IGST under the reverse charge mechanism for services from its overseas branches between July 2017 and March 2022.
  • After closing the FY2017-18 proceedings in August 2024, the DGGI on June 6 ended its review of financial years 2018-19 to 2021-22, extinguishing the Rs 32,403 crore tax demand.
  • The Rs 32,403 crore figure surpassed Infosys’s full FY25 net profit of Rs 26,713 crore, highlighting the magnitude of the tax notice.
  • Infosys had argued that a GST Council-recommended circular from the Central Board of Indirect Taxes and Customs exempted payments to overseas branch offices from GST.
  • The decision leaves Infosys free of its largest ever potential GST liability and underscores its adherence to central and state tax regulations.