Indian Overseas Bank Receives ₹699.52 Crore GST Demand Notice

Public sector lender Indian Overseas Bank (IOB) has received a tax demand notice of ₹699.52 crore from the Deputy Commissioner (ST)-III, Large Taxpayers Unit, Chennai-35, for alleged Goods and Services Tax (GST) liabilities related to the assessment year 2020-21.

The notice, dated February 27, 2025, includes a penalty component of ₹35.26 crore, in addition to tax and interest.

Breakdown of GST Demand

The demand was issued following an annual scrutiny of the bank’s GST filings, during which authorities identified discrepancies in tax payments. In a regulatory filing, IOB disclosed “This is to inform that the Bank has received a demand dated February 27, 2025, from Deputy Commissioner (ST)-III, Large Taxpayers Unit, Chennai-35, for GST liability of ₹699.52 crore, inclusive of interest and penalty from Annual Scrutiny for the Assessment Year 2020-21. The penalty imposed by the authority amounts to ₹35.26 crore.”

IOB to Challenge the Notice

Indian Overseas Bank has stated that it has strong legal grounds to contest the demand and has already taken appropriate legal recourse. The bank, citing expert legal opinion, believes that the order lacks legal justification and expects it to be set aside by appellate authorities.

“The bank has taken appropriate legal recourse in the matter, and based on our assessment and legal course adopted by the Bank and expert opinion, we believe that the demand order shall have no material impact on the financials, operations, or other activities of the bank,” IOB added.

No Expected Financial Impact

Despite the significant amount involved, IOB has reassured stakeholders that the demand notice will not affect its financial position, day-to-day operations, or business activities. The bank remains confident that the appellate authorities will rule in its favor, nullifying any potential liabilities arising from the scrutiny.

Stock Performance 

On March 03, 2025, Indian Overseas Bank (IOB) share price traded 4.66% lower at ₹41.51 at 9:48 AM (IST). Indian Overseas Bank (IOB)’s share price reached a 52-week high of ₹75.45, and a 52-week low of ₹41.20. As per BSE, the total traded volume for the stock stood at 3.43 lakh shares with a turnover of ₹1.44 crores.

At the current price, Indian Overseas Bank (IOB) shares are trading at a price-to-earnings (P/E) ratio of 25.43x, based on its trailing 12-month earnings per share (EPS) of ₹1.64, and a price-to-book (P/B) ratio of 2.77, according to exchange data.

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