Infosys moves Karnataka High Court against Rs 415 crore GST show cause notice

Infosys

Information technology (IT) major Infosys has challenged a Rs 415 crore show cause notice issued by the Directorate General of GST Intelligence (DGGI) in the Karnataka High Court, contesting claims that the company wrongly availed input tax credit (ITC) refunds on services provided by its overseas branches.

In an exchange filing on October 9, the IT major clarified that DGGI had, in May 2025, sought details on its GST refund claims. The company said it provided the required information and held multiple meetings with officials.

However, despite Infosys requesting additional time to respond to a pre-show cause notice dated July 30, the DGGI proceeded to issue a final notice on August 12 for Rs 414.88 crore, excluding interest and penalties.

According to the notice, the DGGI contends that services rendered by Infosys’ overseas branches do not qualify as ‘export of services’ under the GST law, and hence the refund claims were “erroneous.”

Infosys said it has assessed the merits of the notice and, based on advice from external tax and legal experts, filed a writ petition on September 19, 2025, in the Karnataka High Court challenging its validity. The company added that “there is no tax demand as of date” in connection with the matter.

The Bengaluru-based firm reiterated that it has been fully compliant with all central and state GST regulations and stated that there is “no material impact” from the development. Infosys also confirmed it will continue to make requisite disclosures to stock exchanges under SEBI’s listing obligations.

On July 31, 2024, India’s second-largest IT company received a similar pre-show cause demand for alleged tax evasion of over Rs 32,000 crore from the DGGI.

The tax demand made by the Bengaluru GST office generated shockwaves, considering Infosys' track record of being one of India's best-governed firms.

Also, read: Infosys may approach High Court in GST evasion case as rules favour firm, experts say

Subsequently, Infosys said, on June 6, 2025, that the Rs 32,403 crore indirect tax case against it has been closed by the GST Intelligence authority.

In August 2024, DGGI had closed proceedings for FY 2017–18. In a fresh communication received today, Infosys said the DGGI has now also closed the matter for FY19 to FY22, marking the end of the investigation.

Also, read: Tax terrorism at its worst: Former Infosys CFO Mohandas Pai slams Rs 32,000 cr GST demand to IT firm