TNGST demand reduced to Rs. 208.91 crore from Rs. 337.79 crore after remand order
The Bank has received a demand order under the Tamilnadu Goods & Service Tax Act, 2017 for FY 2021-22.
By ScoutQuest · · 2 min read
- Tax demanded
- Rs. 110.37 crore
- Interest and penalty
- Rs. 98.52 crore
- Total claim
- Rs. 208.91 crore
What the update says
The Bank has received a demand order under the Tamilnadu Goods & Service Tax Act, 2017 from the Deputy Commissioner, State Tax, Tanjore, for FY 2021-22. The order is a remand order passed pursuant to the direction of the Madurai Bench of the High Court of Madras.
The numbers
- Tax demanded: Rs. 110.37 crore
- Interest and penalty: Rs. 98.52 crore
- Quantum of claim: Rs. 208.91 crore
- Earlier position: tax demand of Rs. 191.05 crore, which with interest and penalty totalled Rs. 337.79 crore
- The update states the demand has now been reduced to Rs. 208.91 crore
What the demand rests on
The update lists the major issues in the demand
- Taxing a portion of exempt income, such as interest on investments, profit on sale of securities and exchange profit
- Taxing estimated income not collected by the Bank, or for services not rendered, and estimating taxable supplies
- Not allowing 100% input tax credit (ITC) on same PAN GSTINs
- The GST Department did not accept the Reconciliation statement in GSTR-9C shared by the Bank, which the Bank says duly tallied with its financials and with the certificate given by the Statutory Central Auditors for exempt and taxable supplies of the year
The Bank's stated position
- The Bank says it is regular in GST compliance from the rollout of GST, discharging GST on all charges collected from customers that are subject to GST, and claiming only the eligible ITC
- The GST Audit did not point out any evasion of income from the books of accounts, according to the update
- The Bank says the demand was made ignoring valid proofs submitted during adjudication, including a certificate from its Statutory Central Auditors
- The Bank intends to take appropriate legal remedies as provided in the GST Act
- The Bank states the demand is devoid of legal sanctity and consists of factual errors, and that accordingly there will not be any material financial implications on the Bank
What to track
The matter is not concluded: the Bank has said it will pursue legal remedies. How the remand proceedings and any legal remedy proceed would be the markers to watch.
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More numbers
- Tax demanded in the TNGST orderRs. 110.37 crore
- Interest and penalty in the TNGST orderRs. 98.52 crore
- Total quantum of claimRs. 208.91 crore
- Original tax demandRs. 191.05 crore
- Original total demand with interest and penaltyRs. 337.79 crore
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