The High Court of Madras has granted interim stay in the favour of Karur Vyasa Bank against a Show Cause Notice received under section 73 of the Goods and Services Tax Act, 2017, for the FY 2020-21.
The bank received Show cause notice (DRC-01) issued for ₹ 2,537 Cr. The DRC stands for the Demand and Recovery Certificate which is issued when there is a mismatch in the ‘claimed’ and the ‘available’ value of input tax credits (ITC) for any GSTIN.
The bank filed a writ petition challenging the SCN issued charging thereunder as the GST on the entire Interest Income earned by the bank across all states which is exempt under GST Act and also GST on interest income earned from Tamil Nadu state; GST under Reverse Charge Mechanism on the total expenses of the bank including salary payment to employees whereas the bank had discharged GST on RCM basis wherever applicable; GST on the entire other income of the bank earned across all states (on which GST has already been paid in the respective states); and lastly, GST on the amount appropriated from profits earned on sale of investments transferred to Capital Reserve.
The disclosure was made before the exchange under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
