Jammu Kashmir Bank has been served a Goods and Services Tax (GST) demand notice by the Joint Commissioner of the Central GST Commissionerate, Jammu, amounting to approximately ₹8,130.66 crore.
With additional penalties and interest, the total demand reaches nearly ₹16,000 crore—exceeding the bank’s market capitalization of ₹11,273.91 crore.
Despite the significant amount, J&K Bank maintains that the notice will not materially impact its financials or operations.
A senior bank official said that the dispute arises from the treatment of interest receivable under the Transfer Pricing Mechanism (TPM), which has been classified as a taxable financial service.
Following the news, the bank’s share price dropped to an intraday low of ₹99.26 on the National Stock Exchange, a decline of 3.95%, before recovering to ₹101.35, down 1.94% by 11:50 AM.
In an official statement, J&K Bank asserted that it has a strong case and believes the demand is legally unjustified. “Based on expert opinion, we are confident that the order will be overturned in court,” the statement read.
The bank further clarified that TPM, a standard industry practice approved by the Reserve Bank of India (RBI) since 1999, is an internal fund allocation tool used by all banks and does not constitute a taxable transaction.
J&K Bank emphasized that TPM entries are notional and nullified in entity-level financial statements, reiterating that the demand has no bearing on its financial health.
The bank has initiated legal proceedings to contest the notice.