Equitas Small Finance Bank GST demand cut to ₹24 crore from ₹534 crore

Private lender Equitas Small Finance Bank Ltd on Monday (September 28) said its proposed Goods and Services Tax (GST) assessment has been substantially reduced to ₹23.95 crore from ₹533.81 crore following a personal hearing and subsequent communication from the GST authority.

The revised amount comprises tax of ₹21.67 crore, interest of ₹0.11 crore and penalty of ₹2.17 crore. The original show cause notice (SCN) had proposed tax of ₹485.18 crore, interest of ₹0.11 crore and penalty of ₹48.52 crore.

The personal hearing in relation to the SCN was held on September 25, 2026. The notice was issued by the Office of the Deputy Commissioner (State Tax), Central-III Zone, Commercial Taxes Department, Government of Tamil Nadu, under Section 73 of the Central Goods and Services Tax Act, 2017 and the Tamil Nadu Goods and Services Tax Act, 2017 for financial year 2022-23.

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The bank said the revised computation includes a substantial reduction in the exemption-related turnover proposed to be assessed following its submissions on interest income from loans and advances. Certain specified receipts and reconciliation items remain subject to verification of supporting documents, the bank said.

Equitas Small Finance Bank said it believes that the remaining amount is also eligible for exemption. The bank will submit further evidence and documents to the authorities to establish its position and will provide updates on further developments.

Last week, ESAF Small Finance Bank said its board had approved raising up to ₹500 crore through private placement of NCDs to augment Tier II Capital. The proposed NCD issue will comprise Listed, Rated, Taxable, Unsecured, Transferable, Redeemable and Fully Paid Up Basel II-compliant Lower Tier II subordinated bonds.

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"...we hereby inform that the board of directors of the bank, at its meeting held on Wednesday, September 23, 2026, inter alia, considered and approved the proposal for raising Tier II Capital through the private placement of Unsecured, Redeemable, Non-Convertible Debentures (“NCDs”) aggregating up to ₹500 Crores (Rupees Five Hundred Crores only), in one or more tranches, up to the conclusion of the next Annual General Meeting of the Bank," the bank said in a stock exchange filing.

Shares of ESAF Small Finance Bank Ltd ended at ₹43.58, up by ₹0.81, or 1.89%, on the BSE.