J&K Bank Faces Hefty ₹16,000 Crore GST Notice, Shares Dip Amid Market Reaction
New Delhi, Feb 5: Jammu and Kashmir Bank Ltd. witnessed a decline in its stock value on Wednesday after the lender received a substantial Goods and Services Tax (GST) notice amounting to approximately ₹16,000 crore, inclusive of tax liability and penalties. The development triggered a negative sentiment in the market, leading to a dip in the bank’s stock price.
During early trade, J&K Bank’s shares tumbled to an intraday low of ₹99.26 per share on the National Stock Exchange (NSE), marking a 3.95% decline. However, as the session progressed, the stock recovered some of its losses, trading at ₹101.35 per share at around 11:50 AM, still down by 1.94%.
In an official regulatory filing, J&K Bank confirmed that it had received a demand notice dated February 4, 2025, from the Joint Commissioner, Central GST Commissionerate, Jammu. The notice pertains to a GST liability of ₹8,130.66 crore along with an equally hefty penalty of ₹8,130.66 crore, bringing the total demand to approximately ₹16,000 crore. The bank, however, emphasized that the demand order will not have any material impact on its financials, business operations, or overall activities.
J&K Bank, with a market capitalization of ₹11,273.91 crore, remains a key financial institution, and the magnitude of this GST notice is 1.5 times its total market cap. Despite this regulatory development, the bank has continued to demonstrate financial resilience. It reported a 26% year-on-year increase in net profit, reaching ₹532 crore in the December 2024 quarter, compared to ₹421 crore in the corresponding period last year. Additionally, the bank’s net interest margin (NIM) for the quarter stood at 4.04%, reflecting a sequential improvement of 14 basis points.
Market analysts and stakeholders will closely monitor further regulatory responses and potential legal proceedings surrounding this tax liability. The bank’s management is expected to engage with the authorities to seek clarity and possible resolutions regarding the hefty GST demand.
