Indian Overseas Bank Faces Rs 8.23 Cr GST Penalty Over SARFAESI Asset Sale; Plans to File Appeal:

Indian Overseas Bank Faces Rs 8.23 Cr GST Penalty Over SARFAESI Asset Sale; Plans to File Appeal Indian Overseas Bank (IOB) has disclosed to the stock exchange that it has received an order passed by the Office of the Commissioner, Central Tax (Delhi West), Central Goods and Services Tax, Delhi West Commissionerate, under Section 74(9) of the CGST Act 2017. The bank had received the communication on March 30, 2026. The said order has raised a GST demand amounting to Rs 8.23 crore on the bank. The order pertains to the financial year 202-21. According to the tax authorities, the penalty arises from the bank’s actions while recovering dues under the SARFAESI Act, where it took possession of a secured asset and transferred it to a buyer through an e-auction. The tax authorities treated this transaction as taxable, considering it a “supply” under GST law.

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However, the bank has disagreed with this interpretation of the tax authorities. It argues that such actions are part of enforcing its legal rights as a secured creditor and not a commercial activity; hence, such transactions should not be categorised as supply under GST law, which is a value-added tax levied on most goods and services sold for domestic consumption. The bank has clarified that it is not satisfied with the said order and plans to file an appeal against it before an appropriate forum within the statutory time limit, as it believes it has sufficient factual and legal grounds to challenge the order reasonably. Consequently, it believes the entire penalty will be set aside. Moreover, the bank does not expect any impact on its financial, operational, or other business activities on the grounds of the present action.

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The bank has made the aforementioned disclosure through a regulatory filing dated March 30, 2026, addressed to the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Limited (NSE), issued under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.