08:29 AM EDT, 08/02/2024 (MT Newswires) -- Infosys ( INFY ) said Friday that it received a pre-show cause notice from Karnataka State GST authorities for the payment of goods and services tax amounting to 32,403 Indian crore rupees ($3.87 billion), covering expenses from July 2017 to March 2022 for its overseas branch offices.

The company said in a stock exchange filing that it has replied to the pre-show cause notice, saying GST is not applicable on these expenses. Infosys ( INFY ) cited a recent circular from the Central Board of Indirect Taxes and Customs, which said that services provided to an Indian entity by overseas branches are not subject to GST as recommended by the GST Council.

Infosys ( INFY ) issued the statement in response to multiple news reports about the issue. Following the media reports, Infosys ( INFY ) said it also received a pre-show cause notice from the Director General of GST Intelligence.

"Infosys ( INFY ) has paid all its GST dues and is fully in compliance with the central and state regulations on this matter," the company said in the stock exchange filing.

Shares of the Indian IT services firm fell 1.5% in recent premarket activity.

Price: 21.96, Change: -0.34, Percent Change: -1.52