HCL Infosystems CESTAT Sets Aside ₹16.67 Crore Tax Demand

Key Development

HCL Infosystems Limited received a favorable order dated August 12, 2026, from the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad. The appellate tribunal allowed the company's appeal and set aside Order-in-Original No. 22/Commr./ST/Noida/2018-19 dated October 31, 2018, which was passed by the office of the Commissioner, Central Goods & Services Tax Commissionerate, Noida.

Financial Impact

The CESTAT order sets aside a tax demand of ₹16.67 Crores that had been confirmed against the company under Section 73 of the Finance Act, 1994. The order also nullifies the applicable interest and equivalent penalty that had been levied along with the principal tax demand. This results in the complete elimination of this financial liability from the company's records.

Issue Involved

The dispute concerned the applicability of Service Tax under reverse charge mechanism on royalty payments made outside India. The tax authorities had originally demanded service tax on these royalty payments, which the company contested through the appellate process.

Legal Status

The CESTAT order represents a final resolution at the tribunal level. However, the Department retains the right to appeal against this order before the appropriate higher judicial forum, as permissible under law.