Infosys tax evasion case: Karnataka GST watchdog withdraws notice, orders response to central authority

Infosys announced on August 1, 2024, that the Karnataka state GST watchdog has withdrawn its pre-show-cause notice related to alleged GST evasion. The company has been directed to submit further information to the Directorate General of GST Intelligence (DGGI).

The initial notice concerned claims of indirect tax evasion amounting to ₹32,403 crore over services provided by Infosys's overseas branches. The DGGI is investigating whether Infosys failed to pay Integrated Goods and Services Tax (IGST) on these services from abroad.

Infosys clarified in its regulatory filing that it believes GST does not apply to these expenses, citing a recent Central Board of Indirect Taxes and Customs circular. The company asserts that all GST dues have been paid and it remains compliant with all regulations.