Lemon Tree Hotels’ material subsidiary, M/s Berggruen Hotels Private Limited, has received an intimation from the Deputy Commissioner of Commercial Taxes, Bengaluru, regarding a proposed tax, interest, and penalty demand totaling ₹6.05 crore for FY 2022-23. This arises from alleged GST compliance issues, including turnover mismatches and input tax credit claims. The subsidiary is evaluating the grounds and intends to file a response.
Tax Demand Issued to Subsidiary
Lemon Tree Hotels Limited announced that its material subsidiary, M/s Berggruen Hotels Private Limited, has received an intimation (Form GST DRC-01A) from the Office of the Deputy Commissioner of Commercial Taxes, (Audit), Bengaluru. This intimation proposes a demand for tax, interest, and penalty amounting to ₹6,05,92,723 (₹2,94,01,042 GST + ₹2,31,26,135 Interest + ₹37,65,546 Penalty) for the Financial Year 2022-23. This demand is under Section 73(5) of the KGST/CGST Act, 2017.
Alleged GST Compliance Issues
The proposed demand stems from several alleged GST compliance matters concerning the subsidiary for FY 2022-23. These include: a mismatch between reported turnover in GSTR-3B and GSTR-1, leading to an alleged short declaration of taxable turnover; non-submission of purchase registers and supporting invoices for Input Tax Credit (ITC) claims; non-submission of ageing and payment details for outstanding trade payables, which could result in the reversal of ITC for amounts unpaid beyond 180 days; non-substantiation of nil-rated/exempt turnover, treated as taxable; and non-substantiation of scrap sale income, leading to alleged non-discharge of applicable GST liability.
Subsidiary’s Response and Impact
M/s Berggruen Hotels Private Limited is currently evaluating the grounds raised in the intimation. The subsidiary intends to file its response and objections within the prescribed timeline of September 21, 2026. The company has stated that there is no material impact on the financial operation of the listed entity, except for the extent of the amount specified in the tax demand. Further legal recourse will be pursued if a Show Cause Notice or adjudication order is issued.
Source: BSE
