ICICI Bank Stumbles Upon Rs 7.47 Crore GST Hurdle in Maharashtra

ICICI Bank faces a tax demand surpassing Rs 7.47 crore from the Maharashtra Goods and Services Tax (GST) department. This stems from a recent GST audit questioning the bank’s claims of input tax credit and its dealings with suppliers whose registrations were revoked. The department’s claim comprises a GST demand of Rs 3.58 crore, interest payment of Rs 3.78 crore, and a penalty of Rs 11 lakh. ICICI Bank plans to appeal the order.

This development comes amidst a wave of tax notices issued by the Maharashtra GST department this month. Reports suggest these notices target multiple banks regarding the taxability of custodial services offered to foreign portfolio investors (FPIs). The department argues that these services, despite facilitating exports, don’t qualify for zero-rated GST treatment.

Earlier in September, banks faced a different tax challenge concerning the use of their brand names by branches and subsidiaries. A ruling by the Authority for Advanced Rulings (AAR) clarified that each entity within a bank with a separate GST number would be considered a distinct taxable entity.

These recent developments highlight the evolving landscape of GST regulations for financial services in Maharashtra. With ongoing disputes and evolving interpretations, banks are likely to adapt their practices and engage in dialogue with authorities to ensure compliance and clarity.