GST Jigsaw: SBI Cards Faces Big Puzzle, Promises a Picture-Perfect Defense

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SBI Cards and Payment Services Ltd. has received a significant show-cause notice from GST authorities, demanding ₹81.93 crore in allegedly ineligible input tax credit (ITC) claims. The notice, issued by the Additional Commissioner (East 1) of CGST Gurugram on June 30, 2025, covers financial years 2018-19 to 2020-21.

Key Highlights:

Disputed ITC Breakdown:

₹81.45 crore attributed to mismatches between GSTR-2A and GSTR-3B filings.
₹47.53 lakh linked to supplies from vendors with retrospectively cancelled GST registrations or non-filers of GSTR-3B.

Legal Basis: Notice issued under Section 74(1) of the CGST Act, 2017, with parallel SGST/IGST provisions.

Company's Defense: SBI Cards asserts ITC was availed "strictly in terms of GST law" and expects the demand to be dropped, citing a "strong case on merits" .

Market Impact: Shares fell 1.95% to ₹932.35 on the BSE following the disclosure .

Authorities' Demands:

Recovery of ₹47.53 lakh ITC (IGST: ₹46.98 lakh, CGST/SGST: ₹27,513 each) for FY2019-20/2020-21.
Repayment of ₹81.45 crore ITC (IGST: ₹63.55 crore, CGST: ₹8.89 crore, SGST: ₹8.99 crore) for discrepancies in 2018-21 filings.
Interest under Section 50 of CGST Act from due dates until actual deposit.
Penalty equivalent to the total disputed ITC amount [Query].

SBI Cards has 30 days from notice receipt to respond. The company maintains confidence in a favorable outcome, emphasizing compliance with GST regulations. The case highlights intensified GST scrutiny on financial services, with outcomes likely to influence sectoral compliance approaches.

Source: CNBC-TV18, SBI Cards Exchange Filing