Shares of Infosys Ltd. are trading flat after touching a day’s high of Rs 1,867.90 on 1st August after the company received a pre-show cause notice from Karnataka State GST authorities for a GST payment of Rs 32,403 crore for the July 2017-March 2022 period related to expenses incurred by Infosys’ overseas branch offices.

The company responded to the pre-show cause notice in stock exchange filings. They received another pre-show cause notice from the Director General of GST Intelligence on the same matter. The company is in the process of responding to the new notice.

The company believes GST is not applicable to expenses incurred by its overseas branch offices. A recent circular issued by the Central Board of Indirect Taxes and Customs has mentioned that services supplied by overseas branches to the Indian entity are outside the ambit of GST. Infosys highlighted this circular, issued on the GST Council’s recommendations, in their statement.

The company stated that GST payments are eligible for credit or refund against the export of IT services. They asserted that it has paid all its GST dues and complies with central and state regulations. Infosys reported better-than-expected Q1 results.

The company’s shares have rallied 17.5% in the past month. They are up 37% in the past year.

At 11:26 AM, the shares of Infosys Ltd. were trading 0.57% lower at Rs 1,857.55 on BSE.

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