Infosys on Saturday announced that the Directorate General of Goods and Services Tax Intelligence (DGGI) is closing the pre-show cause notice proceedings for the financial year 2017-2018, which was valued at Rs 3,898 crore. Earlier, on July 31, the DGGI had issued a demand for alleged tax evasion exceeding Rs 32,000 crore.

“The Company has now received a communication from DGGI closing the pre-show cause notice proceedings for the financial year 2017-2018. The GST amount as per the pre-show cause notice for this period was Rs. 3,898 Crs,” Infosys said in an exchange filing.

A DGGI report found that Infosys had not paid Integrated Goods and Services Tax (IGST) on services from its overseas branches between July 2017 and 2021-22. As a result, Rs 28,000 crore for the fiscal year 2022 is still being reviewed by the authorities.

The company had earlier announced that Karnataka state authorities had withdrawn the pre-show cause notice it received on July 31 and instructed the company to provide additional information to the Directorate General of Goods and Services Tax Intelligence (DGGI) regarding the issue.

Infosys stated that it has settled all its GST payments and that the GST claimed by DGGI does not apply to its expenses. "Infosys has paid all its GST dues and follows all central and state regulations," the company said in a filing on July 31.

The next day, Infosys announced that Karnataka state authorities had withdrawn the pre-show cause notice issued on July 31 and instructed the company to provide additional responses solely to the DGGI.

Notably, Infosys received the pre-show cause notice from the DGGI shortly after media reports revealed that the Karnataka state GST authorities had issued a notice regarding the same issue, the company disclosed in its July 31 filing.