The company has however provided clarification on the matter via a filing to the exchanges.
“Karnataka State GST authorities have issued a pre-show cause notice for payment of GST of Rs 32,403 crores for the period July 2017 to March 2022 towards the expenses incurred by overseas branch offices of Infosys Limited. The Company has responded to the pre-show cause notice. Subsequent to the publication of the news articles the Company has also received a pre-show cause notice from the Director General of GST Intelligence on the same matter and the Company is in the process of responding to the same,” said Infosys in its filing.
Infosys has argued that as per a recent circular issued by the Central Board of Indirect Taxes and Customs on the recommendations of the GST Council, GST does not apply to such services as these are provided by the overseas branches to Indian entities.
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“It is also important to note that the GST payments are eligible for credit or refund against export of IT services,” Infosys added while clarifying that it has paid all its GST dues and is fully in compliance with the central and state regulations on this matter.
Earlier in July, the shares of Infosys surged 19% when it also reported its Q1 results in which the company posted a 7% YoY increase in its profit after tax.
Shares of Infosys have increased by 36% in the last one year and 20% in the current calendar year so far.
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