1. Karnataka State authorities withdrew a pre-show cause notice for payment of Rs 32,403 crore GST to Infosys and directed the company to submit further response to DGGI central authority.
2. The notice pertained to GST demand for the period July 2017 to March 2022 towards expenses incurred by Infosys’ overseas branch offices.
3. The Directorate General of GST Intelligence in Bengaluru alleges that Infosys did not pay IGST on import of services and included expenses towards overseas branch offices in export invoice.
4. Infosys shares settled 0.84 per cent lower at Rs 1852.30 on BSE on Thursday.
5. Infosys believes GST was not applicable on such expenses as per regulations and recent circular issued by Central Board of Indirect Taxes and Customs.
6. The Rs 32,403 crore tax demand is more than a year’s profit for Infosys, which reported a profit of Rs 26,233 crore in FY24.
7. GST authorities claim Infosys is liable to pay IGST under reverse charge mechanism on supplies received from branches located outside India.