J&K Bank receives Rs 400 crore GST demand notice

Srinagar, Mar 23: Jammu and Kashmir Bank Ltd. has received a Goods and Services Tax (GST) demand notice of approximately Rs 400 crore from the Additional Commissioner of the Central GST Commissionerate, Jammu, the bank said in a regulatory filing on Tuesday.
The demand includes a GST liability of about Rs 200 crore along with an equal amount as penalty, officials said.
“This is to inform that the Bank has received a demand dated March 23, 2026 from Additional Commissioner, Central GST Commissionerate, Jammu for GST liability of Rs 200,20,80,009 with applicable interest and penalty of Rs 200,20,80,009,” the bank said in its exchange filing.
The development comes even as the bank reported improved financial performance for the third quarter of the current fiscal year.
The notice is significant as it raises compliance and financial implications for the bank, although officials have not yet indicated whether the demand will be contested or settled.
According to the filing, the GST component stands at over Rs 200 crore, with a matching penalty amount, effectively doubling the total exposure to around Rs 400 crore, excluding applicable interest.
Financial experts said such tax demands are subject to legal and procedural review, and companies often seek clarification or challenge them through appropriate forums.
Meanwhile, Jammu and Kashmir Bank reported an 11% increase in net profit for the third quarter ending December 31, 2025.
The bank posted a net profit of Rs 589 crore, compared to Rs 531 crore in the corresponding quarter of the previous fiscal year.
Total income during the quarter rose to Rs 3,593 crore, up from Rs 3,448 crore in the same period last year, reflecting steady operational growth.
Asset quality also improved, with gross non-performing assets (NPAs) declining to 3% of gross loans in the December quarter of FY26, compared to 4.08% a year earlier.
Market reaction to the developments remained positive, with the bank’s stock rising during trading.
Shares of J&K Bank surged as much as 5.03% to Rs 114.83 before closing 3.46% higher at Rs 113.11 apiece. This compared with a 1.78% gain in the benchmark Nifty index.
Analysts said the rise in share price suggests investor confidence in the bank’s financial performance, despite the tax demand.
“The market appears to be factoring in the bank’s improved earnings and asset quality, even as the tax issue emerges,” a market analyst said.
Jammu and Kashmir Bank, a key financial institution in the region, continues to play a significant role in banking and credit delivery, particularly in Jammu and Kashmir. [KNT]