City Union Bank has received a fresh GST assessment order reducing the tax demand, including interest and penalty, to ₹208.91 crore for FY22 from ₹337.79 crore earlier, following a remand by the Madurai bench of the Madras High Court.
The bank received the order from the Deputy Commissioner of State Tax, Thanjavur, on October 14, according to a regulatory filing.
The revised demand comprises ₹110.37 crore in tax and ₹98.52 crore in interest and penalty, the bank said. The original order, dated December 29, 2025, had raised a tax demand of ₹191.05 crore, along with ₹143.73 crore in interest and penalty.
The dispute relates to the Tamil Nadu Goods and Services Tax Act, 2017, and covers issues including the taxation of interest on investments, profits from the sale of securities and foreign exchange gains. The department has also raised concerns over estimated income not collected by the bank, services allegedly not rendered, the estimation of taxable supplies and the denial of full input tax credit across GST registrations linked to the same PAN.
City Union Bank said the GST department had not accepted its reconciliation statement in GSTR-9C, which it said tallied with its financial statements and was supported by a certificate from its statutory central auditors.
The bank maintained that it had complied with applicable GST provisions, discharged tax on eligible customer charges and claimed only eligible input tax credit. It also said the GST audit had not identified any income evasion in its books.
The lender said it would pursue appropriate legal remedies under the GST law, adding that it considered the demand legally unsustainable and based on factual errors.
The bank does not expect the demand to have any material financial implications, it said.
Source from: https://legal.economictimes.indiatimes.com/news/corporate-business/city-union-banks-gst-demand-cut-to-208-91-crore-from-337-79-crore/134960522
