IT behemoth Infosys says the Karnataka government withdrew the pre-show cause notice which was previously issued over allegations of tax evasion.

What Happened: Infosys revealed on August 1 that the Karnataka state authorities have rescinded the pre-show cause notice that was served to the company just a day before. The authorities have now instructed Infosys to provide additional responses to the Directorate General of Goods and Services Tax Intelligence (DGGI) concerning the matter.

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The Bengaluru-headquartered firm had been slapped with a demand for alleged tax evasion amounting to over ₹32,403 crore by the DGGI on July 31. The demand had sent shockwaves across the industry, given Infosys’ standing as one of the most well-governed companies in India.

In response to these allegations, Infosys asserted that it has cleared all its GST dues and is in complete compliance with both central and state regulations on this issue. The company’s former CFO, Mohandas Pai, termed the situation as “tax terrorism” and urged for immediate intervention from the finance ministry.

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