Mphasis to challenge Karnataka tax penalty over GST issues

Mphasis announced on December 25, 2025, that it has received an order from the office of the deputy commissioner of commercial taxes-large taxpayer unit-1, Bangalore, imposing a penalty of INR 3,290,801 under Section 73(9) of the Karnataka Goods and Services Tax Act, 2017. The penalty stems from a DRC-07 order citing non-remittance of GST on sales marketing and support services, non-realization of foreign remittance against exports, incorrect availment of ineligible ITC, and interest on ITC reversal.

Mphasis stated its intention to legally contest the DRC-07 order, asserting that it has reasonable merit to win in higher appellate fora. The company believes that the quantum of tax demand, including interest and penalties, is not expected to have a significant financial or operational adverse impact.

The disclosure of this development was delayed due to the time required to verify the facts surrounding the penalty order, ensuring accurate and complete reporting. The information is also available on the company's website.