City Union Bank Limited has informed the Exchange about Demand Order under TNGST Act 2017
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City Union Bank has received a demand order from the Assistant Commissioner (ST) of Kumbakonam Town for FY 2021-22, demanding Rs 191.05 crores in tax along with applicable interest and penalty under section 73 of the Tamil Nadu GST Act, 2017. The demand relates to taxing certain exempt incomes, taxing service charges on an estimated basis, and disallowing ITC claims. The bank has stated that it has been fully compliant with GST provisions since the rollout of GST and will pursue legal remedies to contest the order. The bank has also indicated that, in its view, there will be no material financial impact as it believes the demand lacks legal merit.
The Rs 191.05 crore demand is significant relative to the bank's size and could create short-term uncertainty, but the bank's strong stance on compliance and its plan to legally challenge the order may limit downside. Shareholders should monitor updates on the legal proceedings, as an adverse ruling could materially impact earnings.