City Union Bank Limited

Key Quantitative Figures & Order Details

  • Issuing Authority: Deputy Commissioner, State Tax, Tanjore.
  • Date of Receipt: October 14, 2026.
  • Revised Demand Amount: ₹208.91 Crore. This is the total quantum of claim, comprising:
  • Tax: ₹110.37 Crore
  • Interest and Penalty: ₹98.52 Crore
  • Previous Demand Amount: The revised order supersedes an original order dated December 29, 2025, which had a total demand of ₹337.79 Crore, comprising:
  • Tax: ₹191.05 Crore
  • Interest and Penalty: ₹143.73 Crore
  • Reduction in Demand: The new order represents a reduction of ₹128.88 Crore from the original demand.
  • Financial Year in Dispute: 2021-22.
  • Legal Context: The order received is a remand order, issued pursuant to a direction from the Madurai Bench of the High Court of Madras.

Nature of Violations / Contraventions Alleged

The GST Department's demand is based on the following alleged contraventions under the Tamilnadu Goods & Service Tax Act, 2017 (TNGST Act):

  • Taxing the portion of exempt income, specifically Interest on investments, Profit on sale of securities, and exchange profit.
  • Taxing estimated income not collected by the Bank / or for services not rendered.
  • Estimating taxable supplies by violating the conditions enumerated in Sections 7 and 15 of the TNGST Act, 2017.
  • Not allowing 100% Input Tax Credit (ITC) on same PAN GSTINs.
  • The Department did not accept the "Reconciliation statement in GSTR-9C" filed by the Bank, which was certified by the Statutory Central Auditors (SCA) and tallied with the financials.

Stated Financial & Operational Impact and Bank's Position

The Bank has provided a detailed rebuttal to the demand:

  • Compliance Stance: The Bank states it has been regular in complying with all GST compliances since its rollout, without any deviations. It asserts it discharges GST on all applicable charges collected from customers and claims only eligible ITC.
  • Legal Position: The Bank contends its GST compliance is in full conformity with Sections 7 and 15 of the TNGST Act, 2017. It states the GST audit did not point to any income evasion from the books of accounts and that the demand ignores valid proofs, including certificates from its Statutory Central Auditors, submitted during the adjudication process.
  • Financial Impact: The Bank explicitly states, "there will not be any material financial implications on the bank." It characterizes the demand as "devoid of legal sanctity" and consisting of "factual errors."
  • Next Steps: The Bank will take appropriate legal remedies as provided under the GST Act.