Lemon Tree Subsidiary Receives GST Demand Notice of ₹6.03 Crore
Lemon Tree Hotels' subsidiary, Berggruen Hotels, received a GST demand notice for FY 2022-23. The notice includes ₹2.94 crore GST, ₹2.31 crore interest, and ₹0.38 crore penalty, totaling ₹6.03 crore. The subsidiary will respond by September 21, 2026.
The total demand of approximately ₹6.03 crore, while material, is not expected to have a significant impact on the overall financial operations of the listed entity according to the company's statement. However, it represents a contingent liability and requires legal recourse.
The company has received a significant demand notice for GST, interest, and penalty from tax authorities, which is a negative development.
Lemon Tree Hotels Limited has announced that its material subsidiary, M/s Berggruen Hotels Private Limited, has received an intimation in Form GST DRC-01A from the Office of the Deputy Commissioner of Commercial Taxes, (Audit), Bengaluru. This notice, dated September 8, 2026, ascertains proposed tax, interest, and penalty payable under Section 73(5) of the KGST/CGST Act, 2017, for the Financial Year 2022-23.
The total proposed amount includes GST of ₹2,94,01,042, interest of ₹2,31,26,135, and penalty of ₹37,65,546, amounting to a total of ₹6,02,92,723 (approximately ₹6.03 crore).
The alleged contraventions leading to this demand include a mismatch between GSTR-3B and GSTR-1 turnover, non-submission of the purchase register and supporting invoices for Input Tax Credit (ITC), non-submission of ageing and payment details for outstanding trade payables leading to proposed reversal of ITC, non-substantiation of nil-rated/exempt turnover, and non-substantiation of scrap sale income.
The subsidiary is evaluating the grounds raised in the intimation and intends to file its response/objections by September 21, 2026. The company stated that there is no material impact on its financial operations beyond the amount specified in the notice.
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