Indian Overseas Bank has informed the Exchange about Action(s) initiated or orders passed
IOB · price
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Indian Overseas Bank has received an order from the Commissioner of Central Tax (Delhi West) under Section 74(9) of the CGST Act, 2017, imposing a penalty of Rs. 8,23,79,584 (about Rs. 8.24 crore). The penalty relates to a transaction from FY 2020-21 where the bank, acting as a secured creditor under the SARFAESI Act, took possession of a property and transferred leasehold rights through e-auction. The GST department treated this as a taxable supply of service. The bank strongly disagrees, arguing that SARFAESI-driven enforcement actions are involuntary and statutory, and that the bank is not a 'supplier' under GST law. The bank is filing an appeal within the prescribed timeline and expects the entire penalty to be set aside.
The bank expects no financial, operational, or business impact as it believes the penalty will be overturned on appeal. Near-term sentiment may be mildly negative, but since the amount is small relative to the bank's size and the bank is contesting it, the long-term effect on shareholders is likely negligible.