Infosys Challenges ₹415 Cr DGGI GST SCN Notice in Karnataka High Court
The IT Giant clarified that there was no tax demand against the company regarding this matter and stated that this matter is not expected to have any material impact on the company
Infosys, India's second-largest IT services company, has pushed back against a show cause notice (SCN) from the Directorate General of GST Intelligence (DGGI) concerning an alleged ineligible Input Tax Credit (ITC) refund of ₹414.88 crore.
The company announced that it has challenged the notice by filing a Writ Petition in the Karnataka High Court, asserting that it has always been fully compliant with tax laws and that there is currently no pending tax demand.
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The DGGI’s notice, issued on August 12, 2025, centers on ITC refunds claimed by Infosys over the period spanning 2018-19 to 2023-24. The core of the tax dispute is the agency's contention that services provided by the company's overseas branches and subcontractors cannot be classified as "export of services" under the GST regime.
Under India’s GST framework, genuine service exports are designated as "zero-rated supplies," allowing companies to claim a refund of accumulated ITC (tax paid on inputs used to make the export).
According to the ET Report, the DGGI’s investigation was reportedly triggered by intelligence suggesting that Infosys allegedly included work performed by its international units. The tax authority’s position is that these services, performed on foreign soil, do not qualify for the refund mechanism.
Infosys clarified that there was no tax demand as on date against the company regarding this issue and it also stated that the company has always been compliant with all state and central laws.
Infosys detailed the timeline of events, noting that the DGGI initially sought information on the company’s GST refunds in May 2025. This was followed by a pre-show cause notice on July 30, 2025. Infosys stated that it had requested additional time and documentation to prepare a comprehensive response but the DGGI proceeded to issue the formal show cause notice on August 12, 2025.
Following this, the company consulted with external tax consultants and legal counsels. Acting on their advice, Infosys filed the Writ Petition in the High Court of Karnataka on September 19, 2025, challenging the legality and validity of the DGGI’s notice.
The company reiterated its position in the exchange filing, stressing that it adheres to all central and state laws related to GST refunds and confirmed that the matter is not expected to have any material impact on its business or financial operations.
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