Infosys Sees Major Relief As DGGI Closes Rs 32,403 Crore GST Case

The demand was initially linked to alleged non-payment of Integrated GST (IGST) under the reverse charge mechanism for services procured from overseas branches.

Earlier, the DGGI had issued a pre-show cause notice in July 2024 for the period between July 2017 and March 2022, claiming non-compliance with reverse charge IGST rules.

Source : Glassdoor

Infosys, India’s second-largest IT services provider,  received a significant relief from the Directorate General of GST Intelligence (DGGI), which  formally closed proceedings related to a massive Rs 32,403 crore tax demand.

The demand was initially linked to alleged non-payment of Integrated GST (IGST) under the reverse charge mechanism for services procured from overseas branches, reported Business Standard.

The company confirmed the development in a regulatory filing, stating that the matter has been brought to a close. “With the receipt of today’s communication from DGGI, this matter stands closed,” Infosys stated in its filing.

Tax Dispute for FY17–FY22 Resolved

Earlier, the DGGI had issued a pre-show cause notice in July 2024 for the period between July 2017 and March 2022, claiming non-compliance with reverse charge IGST rules. The pre-show cause notice cited a potential tax liability of Rs 32,403 crore.

Infosys clarified that it duly responded to the notice and that the DGGI has now dropped the matter. “It may be noted that the Company had received and responded to a pre-show cause notice issued by DGGI for the period July 2017 to March 2022 on the issue of non-payment of IGST under Reverse Charge Mechanism,” the company mentioned in a filing to the National Stock Exchange.

Additionally, the company revealed that it had already received closure communication in August 2024 for the financial year 2017–18. This latest update now covers subsequent years through FY22, bringing the matter to a definitive end.

CEO Salary Sees Notable Increase

While Infosys secured relief on the tax front, CEO Salil Parekh also recently saw a sharp rise in his remuneration. As per the company’s latest annual report, Parekh’s total compensation for the last fiscal rose by 22 per cent to Rs 80.6 crore, up from Rs 66.2 crore in the previous year.

The salary package included Rs 7.45 crore as base pay, Rs 23.1 crore in bonus, and Rs 49.5 crore in stock-linked perquisites. One key factor behind the jump was the exercise of a higher volume of restricted stock units (RSUs) in FY25.

His overall package now places him at the top of the Indian IT industry’s executive compensation charts.

Comparatively, TCS CEO K Krithivasan earned Rs 26.5 crore, registering a 4.6 per cent increase, while Wipro’s Srini Palia took home Rs 53.6 crore, marking a 10 per cent rise.