Infosys Contests ₹415 Crore DGGI Notice: No Tax Demand Raised Yet

Infosys Contests ₹415 Crore DGGI Notice: No Tax Demand Raised Yet

Infosys Ltd. clarified that the recent communication from the Directorate General of GST Intelligence (DGGI) concerning ₹415 crore is a Show Cause Notice (SCN), which is a proposal to raise a tax demand, not a final tax demand order itself.

The company has taken the matter to the High Court, challenging the SCN related to the Input Tax Credit (ITC) refunds.

Key Points of the Company’s Stance and Legal Action

• SCN vs. Demand Order: Infosys confirmed receiving the SCN proposing a tax, interest, and penalty demand of ₹415.70 crore but stressed that this amount does not constitute a liability yet.
• The Dispute: The SCN pertains to the alleged ineligibility of a refund claimed by Infosys regarding Input Tax Credit (ITC). As a large exporter of IT services, the company operates on a zero-rated basis and claims a refund of accumulated ITC. The DGGI’s notice disputes the legitimacy of this claimed refund.
• High Court Petition: Infosys has filed a writ petition in the High Court to challenge the SCN itself and the proposed demand, indicating its intention to contest the allegations vigorously.
• Financial Impact: The company has reiterated that the notice is not expected to have any material financial impact on its operations.