Shares of the IT services giant Infosys dipped 4.29% to ₹1,743.20 apiece on the BSE today amid the global market sell-off affecting Indian equities as well. The fall in the share price also comes a day after the tech major was granted partial relief in the ₹3,898 crore tax demand notice on Saturday evening by the Directorate General of Goods and Services Tax Intelligence (DGGI).
The stock opened lower at ₹1,761, compared to the previous closing price of ₹1,821.40 on the BSE, in line with the weak broader market. The tech major’s market cap stood at ₹7,28,369.60 crore at the time of reporting. The tech company’s shares rose 6.30% over the past month, while it gained 3.79% in the past six months, and 12.88% year-to-date (YTD). BSE Benchmark Sensex 2.48% down at 78,972.78 today, while Nifty 50 is down 2.41% at 24,122.35.
Indian equity markets experienced a significant correction on Monday, with both the Sensex and Nifty 50 dropping over 2%. The Nifty 50 index fell below the budget-day low of 24,074, continuing to decline as major heavyweights in the index contributed to the downturn.
DGGI closed the tax proceedings against Infosys for the financial year 2017-18 (FY18). “The GST amount as per the pre-show cause notice for this period was ₹3,898 crores,” the tech giant states.
Salil Parekh-led Infosys last week received a pre-show cause notice from the tax authorities demanding a substantial amount of ₹32,403 crore under GST regulations. This claim covers expenses from July 2017 to March 2022 related to Infosys’ overseas branch offices. The company has already responded to the notice issued by the Karnataka State GST authorities. A DGGI report had identified that Infosys did not pay IGST on services received from its overseas branches between July 2017 and 2021-22.
The GST demand for FY18 was set to become time-barred on August 5. The issue relates to the unpaid integrated GST (IGST) under the reverse charge mechanism (RCM) for services reportedly received from Infosys' foreign affiliate. It is purported that Infosys did not pay IGST on services received from its overseas branches under RCM.
The tech giant asserted that it had settled all its GST payments and that the GST claimed by DGGI did not apply to its expenses. “Infosys has paid all its GST dues and is fully in compliance with the central and state regulations on this matter,” the company stated in a July 31 filing.
In July, Infosys reported its earnings for the June quarter, highlighting a 7.1% increase in net profit year-on-year (YoY) and a 3.6% rise in annual revenue. The company achieved an operating margin of 21.1% for the quarter, marking a 0.3% YoY and 1% quarter-on-quarter (QoQ) improvement. For FY25, Infosys has projected a revenue growth of 3%-4% in constant currency and an operating margin of 20%-22%.
During the reviewed quarter, Infosys secured a record 34 large deals, totaling a contract value of $4.1 billion. "We won 34 large deals with a total contract value of $4.1 billion, with 57.6% of the deals being net new," stated Infosys CEO Salil Parekh.
