Infosys Issues Clarification on DGGI’s 415 Crore SCN, Challenges Notice in Karnataka HC
On August 12, 2025, the Directorate General of GST Intelligence (DGGI) issued a show cause notice to India’s second-largest IT services provider, Infosys. It has now issued a clarification letter to that SCN.
The matter began when, in an exchange filing, Infosys claimed that there are no GST (Goods and Services Tax) liabilities against them. The show cause notice issued to Infosys raised questions about their ITC (Input Tax Credit) refund claim and imposed a demand of Rs. 415 crore. The notice further reported that Infosys cannot classify its services provided on foreign soil as export of services, and therefore, its services do not qualify to claim input tax credit (ITC) refunds.
The exchange letter by Infosys reads, “The company has assessed the merits of the show cause notice and also sought advice from external tax consultants and legal counsel.” Further added, “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.”
To the Rs. 415 crore show cause notice (SCN) questioning the ITC refund claim, Infosys has made the following clarifications:
- In May 2025, the Directorate General of GST Intelligence (DGGI) asked Infosys to provide relevant information on their GST refund claim. In return, the company provided all the requested details and also attended the meetings organised by DGGI officials on the same issue.
- On July 30, 2025, the DGGI issued a pre-show cause notice. On this, the company asked the authority to provide additional information/relevant documents and also additional time to submit an appropriate reply to their notice.
- However, DGGI did not accept their request for providing additional time and instead issued a show cause notice dated August 12, 2025, demanding Rs. 414.88 crores from the company, excluding interest and penalties.
- The show cause notice issued by DGGI reads that the services provided by the company’s overseas branches are not part of the export of services and therefore, doest not qualify for ITC refund claim.
- Now, the company has analysed the merits of the show cause notice and has also consulted with external tax consultants and legal counsel. According to their advice, the company decided to challenge the show-cause notice issued by DGGI, hence filed a writ petition in the High Court of Karnataka on September 19, 2025.
As of now, the Company has no pending tax demand related to this matter. The Company wants to emphasise that it has always fully followed all central and state laws and rules regarding GST refunds.
