Jammu & Kashmir Bank Limited Receives GST Demand
The Jammu & Kashmir Bank Limited announced that it has received a demand dated March 23, 2026, from the Additional Commissioner, Central GST Commissionerate, Jammu, for a Goods and Services Tax (GST) liability. The demand includes a tax amount of Rs.200,20,80,009.00, along with applicable interest and a penalty of Rs.200,20,80,009.00.According to details provided, the demand pertains to the period beginning February 23, 2020, and ending March 2024, related to transactions under the Bank’s Transfer Pricing Mechanism (TPM). The GST demand arises from interest receivable under the TPM between the Corporate Headquarters and branches from a common pool of funds, which has been treated as financial services.
The Bank stated that TPM is a management decision tool and a critical component of the profitability measurement process. It facilitates the exchange of funds between business units and is aligned with Reserve Bank of India guidelines. The Bank believes the demand lacks legal justification and intends to pursue legal recourse, anticipating a favorable outcome.
The Bank’s assessment, based on expert opinion, indicates that the demand order will have no material impact on the financials, operations, or other activities of the Bank. A 'Stay Order' has already been granted by the High Court of Jammu and Kashmir & Ladakh at Srinagar against a similar GST demand on TPM transactions.
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