Leading private sector bank ICICI has received a tax demand order from the Maharashtra Goods and Services Tax (GST) department, amounting to more than Rs 7.47 crore. This includes interest demands of more than Rs 3 crore along with a penalty of Rs 11 lakh.

Concerns over ICICI's invalid input tax credit

The state GST audit raised concerns about the bank’s invalid input tax credit (ITC) claims in GSTR-3B/9, unconfirmed in GSTR-2A, and ITC claims from suppliers with canceled registrations. “The bank made a disallowance of input tax credit (ITC) claimed in GSTR-3B/9, which is not confirmed in GSTR-2A and ITC claimed from canceled registration suppliers,” said a state GST official.

The department has specified a GST demand of Rs 3.57 crore with an interest payment of Rs 3.78 crore and a penalty of Rs 11.17 lakh, accumulating to a total demand exceeding Rs 7.47 crore.

ICICI intends to file appeal

In a statement, ICICI Bank said it intends to file an appeal against the order by the state GST.

The Maharashtra GST department has issued notices to multiple banks concerning the taxability of custodial services provided to foreign portfolio investors (FPIs). The state GST authorities assert that the custodial services offered by SEBI-registered custodian banks do not qualify as zero-rated supplies for export purposes.

Earlier, several banks had received GST notices related to the use of their brand names by branches and subsidiaries, following a recent ruling by the Authority for Advanced Rulings (AAR) of Tamil Nadu, Maharashtra, and Karnataka. The ruling stated that each entity in a bank with a different GST number would be considered a distinct entity for tax purposes.

Source: https://www.freepressjournal.in/business/icici-faces-747-crore-tax-demand-maharashtra-gst-department-raises-concerns-over-input-tax-credit-claims