Infosys clarifies on Rs 415 crore show cause notice by DGGI – The Economic Times

The assertion comes a day after the Directorate Normal of GST Intelligence (DGGI) issued a present trigger discover to the Indian IT main for Rs 415 crore over alleged ineligible ITC refunds.

The present trigger discover issued by DGGI alleged that the providers Infosys supplied on overseas soil can’t be categorized as export of providers, and therefore does not qualify for ITC refunds. The providers in query reportedly concerned work carried out by abroad branches and subcontractors on shopper initiatives overseas.

In line with the DGGI’s findings, Infosys — whose exports represent practically 97% of its whole income — filed a number of refund claims throughout a number of GST registrations for the interval. The corporate declared these provides as outward taxable provides (zero-rated) and claimed refunds of accrued ITC underneath Rule 89 of the CGST Guidelines, 2017, learn with Part 20 of the IGST Act, 2017.

Below the GST regime, a zero-rated provide refers to items or providers taxed at 0%. Suppliers of zero-rated provides don’t cost GST on outward provides however can declare a refund of ITC on the quantity spent on inputs used to make the availability, successfully making the availability chain tax-free.

In line with official paperwork seen by ET, DGGI’s investigation was triggered by intelligence inputs suggesting that Infosys had claimed ineligible refunds of ITC for providers that weren’t truly exported.

DGGI had sought data on the GST refunds claimed by the corporate in Might, which was subsequently supplied to the authority. The corporate additionally met with DGGI officers relating to this matter, Infosys stated.

The GST compliance authority issued a pre-show trigger on July 30. Infosys stated it had sought extra data and time to file an appropriate response to the pre-show trigger, which was not supplied by DGGI. As an alternative, a show-cause discover was issued on August 12 for Rs 414.88 crore, excluding curiosity and penalties, the corporate added.

“The corporate has assessed the deserves of the present trigger discover and in addition sought recommendation from exterior tax consultants and authorized counsels. Pursuant to the recommendation, the corporate has on September 19, 2025, filed a writ petition within the Hon’ble Excessive Courtroom of Karnataka difficult the legitimacy of the present trigger discover,” the trade submitting learn.

Emphasising that it’s in compliance with all legal guidelines pertaining to GST refunds, Infosys talked about that the show-cause discover is not going to have any materials affect its enterprise.