SBI Cards and Payment Services Ltd, India's leading pure-play credit card issuer, has received a show cause notice from the CGST Department proposing to disallow input tax credit (ITC) worth Rs 81.93 crore, the company informed stock exchanges on Tuesday.
The notice, issued by the Additional Commissioner (East 1), CGST Gurugram, on June 30, pertains to the assessment period from FY 2018-19 to 2020-21 and invokes Section 74(1) of the Central Goods and Services Tax Act, 2017, alongside applicable provisions under SGST and IGST Acts.
Mismatch in GST Filings at the Core
According to the notice:
- A disallowance of Rs 81.45 crore is linked to mismatches between GSTR-2A and GSTR-3B filings.
- An additional Rs 47.53 lakh pertains to ITC claimed on supplies from vendors whose GST registrations were either cancelled retrospectively or who failed to file GSTR-3B returns.
The authorities have also sought recovery of the disputed ITC along with interest under Section 50 of the CGST Act and a penalty equal to the ITC amount claimed. The total disputed ITC includes:
- Rs 63.55 crore under IGST
- Rs 8.89 crore under CGST
- Rs 8.99 crore under SGST
SBI Cards Confident of Positive Resolution
In its regulatory filing, SBI Cards stated it has availed ITC in compliance with GST law and is confident in the merits of its case. The company is preparing a detailed response and intends to file a reply within the 30-day window provided by the tax authority.
"The company believes that it has a strong case on merits and expects a favourable outcome," the filing added.
Market Reaction
Following the disclosure, shares of SBI Cards closed at Rs 932.35 on the BSE, down Rs 18.55 or 1.95% on Tuesday, reflecting investor caution amid the tax dispute.
This development comes amid rising scrutiny of ITC claims across sectors, as tax authorities tighten audits and compliance enforcement to curb revenue leakages.
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