HCL Infosystems Secures Favorable Order from CESTAT in Tax Dispute Pertaining to Royalty Income
HCL Infosystems Limited has achieved a favorable resolution in a significant tax dispute, following a decision by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad. The tribunal allowed the company's appeal, setting aside a previous order issued by the Commissioner, Central Goods & Services Tax Commissionerate, Noida.The ruling, dated August 12, 2026, concerns the applicability of Service Tax under the reverse charge on royalty paid outside India.
Under the terms of the decision, the tax demand amounting to ₹ 16.67 Crores, along with associated interest and equivalent penalty that had been confirmed against HCL Infosystems Limited under Section 73 of the Finance Act, 1994, stands set aside. This outcome represents a significant positive development for the company in this litigation.
The original demand was issued by the Commissioner, Central Goods & Services Tax Commissionerate, Noida, in an order dated October 31, 2018.
Details of the dispute and the resolution are summarized below:
| Aspect | Details |
|---|---|
| Petitioner | HCL Infosystems Limited |
| Respondent | The Commissioner, Central Goods & Service Tax, Noida |
| Tribunal | Hon'ble CESTAT, Allahabad |
| Issue Involved | Applicability of Service Tax under reverse charge on royalty paid outside India |
| Tax Demand Settled | ₹ 16.67 Crores (along with interest and penalty) |
| Outcome Date | August 12, 2026 |
The department retains the option to appeal against the CESTAT order before a higher forum, as permitted by law.
HCL-INSYS Stock Price Movement
Shares of HCL Infosystems Limited gained ground on Wednesday, settling at ₹11.78 after climbing 3.15%. The stock saw high trading interest during the session, with a volume totaling 543,188 shares recorded.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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