Infosys Clarifies on ₹415 Crore DGGI Show-Cause Notice, Says No Tax Demand Raised Yet

October 9, 2025:
The stock exchanges have sought clarification from Infosys Limited following media reports that the Directorate General of GST Intelligence (DGGI) issued a show-cause notice worth ₹415 crore to the company over alleged ineligible Input Tax Credit (ITC) refunds.

Responding to the reports, Infosys has issued an official clarification outlining the sequence of events and its stance on the matter.

🧾 Company’s Clarification

Infosys stated that:

• In May 2025, the DGGI had sought information on GST refunds claimed by the company. Infosys provided the relevant details and also held meetings with DGGI officials regarding the issue.
• A pre-show cause notice was issued on July 30, 2025, for which Infosys requested additional documents and time to respond.
• The DGGI, however, did not grant the additional time and went ahead to issue a formal show-cause notice on August 12, 2025, amounting to ₹414.88 crore, excluding interest and penalties.
• According to the DGGI, services rendered by Infosys’s overseas branches do not qualify as export of services, and hence the ITC refund claimed was allegedly erroneous.
• Infosys said it has evaluated the merits of the notice and sought advice from external tax and legal experts. Based on this, the company filed a Writ Petition in the Hon’ble High Court of Karnataka on September 19, 2025, challenging the validity of the notice.
• Importantly, Infosys clarified that no tax demand exists as of now regarding this issue.

The company reaffirmed that it has always been fully compliant with all central and state GST laws and regulations concerning refunds.

📊 Exchange Action

Following the initial media report on October 8, 2025, the stock exchanges requested Infosys to clarify the matter to ensure transparency for investors. With the latest statement, Infosys has officially addressed the reports and detailed the steps it has taken.

💬 What’s Next

The matter is currently under judicial review after Infosys’s petition to the Karnataka High Court. Investors and market participants are expected to monitor the court’s proceedings and any further regulatory updates closely.