Infosys gets major relief as ₹32,403 crore GST case closed by tax department

The case related to services that Infosys had availed from its overseas offices between July 2017 and March 2022.

The amount was initially flagged in a "pre-show cause notice" — a preliminary warning issued before formal legal proceedings — wherein tax authorities believed Infosys was liable to pay GST under the Reverse Charge Mechanism for services sourced from its own foreign branches.

Infosys, in its response to the Karnataka GST authorities last year, had strongly disagreed with the notice.

The company argued that, as per prevailing GST regulations, services received from its own overseas offices do not qualify as “imported services” and are therefore exempt from GST.

It further cited clarifications issued by the GST Council and the Central Board of Indirect Taxes and Customs (CBIC) supporting this position.

In a filing to the Bombay Stock Exchange (BSE), Infosys said it had received formal confirmation from the DGGI about the closure of the matter for FY2018–19 to FY2021–22.

The department had already closed the case for FY2017–18 in August 2024. With this recent communication, the issue stands resolved in its entirety.

The potential tax liability of ₹32,403 crore was notably larger than Infosys' annual profit of ₹26,713 crore for FY25, making this development particularly significant for the company and its shareholders.

Infosys reaffirmed its compliance with all GST provisions and said it has consistently met its obligations under both central and state tax frameworks.

For the March 2025 quarter, the company posted a net profit of ₹7,033 crore, down from earlier levels, attributing the decline to increased employee costs and acquisitions. It has projected modest revenue growth of 0–3% for the current financial year amid global macroeconomic challenges.