GST Show Cause Notice demand cut from Rs.533.81 crore to Rs.23.95 crore after hearing

GST demand slashed.

Mon 28 Sep 2026

Original GST Demand

Rs.533,81,24,251/-

Revised GST Demand

Rs.23,95,12,141/-

Revised Tax Component

Rs.21,67,28,670/-

Revised Interest Component

Rs.11,10,604/-

Revised Penalty Component

Rs.2,16,72,867/-

What happened

The bank had earlier intimated receipt of a Show Cause Notice (Form GST DRC-01) from the Deputy Commissioner (ST), Central-III Zone, Commercial Taxes Department, Tamil Nadu, under Section 73 of the CGST Act and TNGST Act, for financial year 2022-23.

A personal hearing was held on September 25, 2026. Following that and a communication dated September 28, 2026, the amount proposed to be assessed was substantially reduced.

The numbers

• Original aggregate proposed: Rs.533,81,24,251/- — tax Rs.485,18,30,588/-, interest Rs.11,10,604/-, penalty Rs.48,51,83,059/-
• Revised aggregate proposed: Rs.23,95,12,141/- — tax Rs.21,67,28,670/-, interest Rs.11,10,604/-, penalty Rs.2,16,72,867/-

Why it reduced

The revised computation reflects a substantial reduction in the exemption-related turnover proposed to be assessed, following the bank's submissions on interest income from loans and advances. Certain specified receipts and reconciliation items remain subject to verification of supporting documents.

What next

The bank believes even the remaining amount is eligible for exemption and says it will produce further evidence and documents to the authorities to establish its position. It will inform the exchanges of further progress in due course.

For investors, this is an update on a tax proceeding: the potential exposure disclosed has come down sharply, and the matter is still at the show cause stage, not a final demand.

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