Infosys responds to DGGI's Rs 415 crore tax notice, read the full clarification letter

Infosys, India’s second-largest IT services provider has issued a clarification letter on show notice served by the Directorate General of GST Intelligence (DGGI). In an exchange filing, the IT giant said that there are no pending Goods and Services Tax (GST) demands against it. Infosys was issued a show cause notice by DGGI questioning their claim of input tax credit (ITC) refunds amounting to Rs 415 crore. A report by Economic Times said that the DGGI’s notice alleged that the services Infosys provided on foreign soil cannot be classified as export of services, and hence does not qualify for ITC refunds.In the exchange letter, Infosys said that the “company has assessed the merits of the show cause notice and also sought advice from external tax consultants and legal counsels.”“Pursuant to the advice, the Company has on 19th September 2025, filed a Writ Petition in the Hon’ble High Court of Karnataka challenging the legitimacy of the show cause notice,” it added.This is with respect to the media reports published on 8th October 2025 regarding a show cause notice issued by Directorate General of GST Intelligence (DGGI) for Rs 415 crore to Infosys over alleged ineligible ITC refunds. The Company would like to clarify on this matter:There is no material impact of this article on the Company. Please note that the Company submits the requisite disclosures to the Stock Exchanges and shall continue to do so as part of its obligation under Regulation 30 of the SEBI Listing Regulations or other relevant applicable laws.This is for your information and records. This will also be hosted on the Company’s website, at www.infosys.comDGGI conducted an investigation which found that Infosys’ exports constitute nearly 97% of its total revenue. The IT giant filed multiple refund claims across several GST registrations for the period. As per DGGI’s findings, the company declared these supplies as outward taxable supplies (zero-rated) and claimed refunds of accumulated ITC under Rule 89 of the CGST Rules, 2017, read with Section 20 of the IGST Act, 2017.A zero-rated supply, under the GST regime refers to goods or services taxed at 0%. As per the rule, suppliers of zero-rated supplies do not charge GST on outward supplies but can claim a refund of ITC on the amount spent on inputs used to make the supply.