The Indian government has stood its ground on a $4 billion (₹33,577 crore) tax demand from IT behemoth Infosys, despite the firm’s plea for leniency.

What Happened: The Indian government is not planning to ease the tax demand it issued to Infosys last month, Reuters said, citing government sources. The tax demand adheres to the goods and services tax (GST) rules, the report added. 

The country's second-largest IT services firm has reportedly requested 10 days to provide its response after consulting with tax officials.

Earlier this month, Infosys received a pre-show cause notice from the Karnataka State GST authorities. It demanded the payment of ₹32,403 crore in GST from July 2017 to March 2022, the company said in the release. The payment is related to expenses incurred by the company's overseas offices. 

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A day later the IT major said that Karnataka state authorities had rescinded the notice. Infosys was instructed to provide additional responses to the Directorate General of Goods and Services Tax Intelligence (DGGI) concerning the matter.

Infosys had earlier asserted that it is in compliance with all central and state regulations and has paid all its dues. Both the Indian Finance Ministry and Infosys have yet to comment on the matter, Reuters added.

Price Action: Infosys shares were trading 0.01% higher at ₹1,752.15 on Tuesday afternoon.

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