India will not relax its tax demand on Infosys: Report

New Delhi: The Indian government is not considering any relaxation in the tax demand it sent to Infosys last month, according to a government source.

The tax demand is in accordance to the good and services tax rules and the country's second-largest IT services firm has sought ten days to submit its response after meeting tax officials, the source said.

The source declined to be named as they were not authorised to speak to the media.

Shares of Infosys, which were up 1.6 per cent before the news amid a broader market rebound, briefly trimmed gains to about 0.3 per cent after the news. They were last up 1.2 per cent.

India sent a tax demand of over 320 billion rupees ($4 billion) to Infosys, related to services received by the company from its overseas branches between July 2017 to 2021-22. This amounts to 85 per cent of its revenue for the quarter ended June 30.

In a notification to stock exchanges on August 3, the company said it has received communication that the demand for the financial year 2017-18 of 38.98 billion rupees has been closed.

The company had previously said it paid all its dues and is in compliance with central and state regulations.

India's finance ministry and Infosys did not immediately respond to an emailed request for comment.