“All the TPM entries are purely notional in nature and when entity level financial statements are prepared, the expenditures and incomes accruing from within the Bank on account of TPM interest distribution are nullified,” per the filing.
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NISSAR AHMAD
The Jammu and Kashmir Bank on Tuesday said it has received a demand order for GST liability of of ₹200.20 crore from the Additional Commissioner, Central GST Commissionerate, Jammu.
The demand order pertains to the period beginning from February 23, 2020 till March 2024 for transactions under the Banks Transfer Price Mechanism (TPM), according to the private sector bank’s regulatory filing.
“Since the Bank is, in law, a single legal entity comprising its Corporate Headquarter as also all the branches, it is legally obliged to reflect its financial statements prepared under the provisions of regulatory laws applicable to it for its whole entity.
“All the TPM entries are purely notional in nature and when entity level financial statements are prepared, the expenditures and incomes accruing from within the Bank on account of TPM interest distribution are nullified,” per the filing.
The Bank emphasised that the said mechanism has been adopted by all Banks in India pursuant to Reserve Bank of India;s 1999 guidelines, with the subject “Risk Management Systems in Banks” wherein the RBI provided for evolution of Fund Transfer Mechanism to supplement the Assets Liability Management in Banks.
The Bank said it has strong case on merits and has reasonable belief on the basis of expert opinion on subject that the demand is without legal justification and will be set aside by Court of appropriate jurisdiction.
Further, the Bank said it believes the demand order will have no material impact on its financials, operations or other activities.
The Bank mentioned that already a “Stay Order” has been granted by the High Court of Jammu and Kashmir & Ladakh at Srinagar against a similar GST demand on TPM transactions for the Bank on another GST registration of UT of Jammu and Kashmir.
Published on March 24, 2026
