Mahindra Holidays & Resorts India Ltd. on Sunday said that they have received a tax notice of over Rs 363 crore for the financial year 2018-19 including penalty, related to reporting of IGST on its club membership services.
Date of Notice
The show cause notice was issued on 28th June 2025 by the State Tax Officer, Anna Salai Central III, Chennai, Tamil Nadu.
Total Demand Amount
Mahindra Holidays stated - "The Company has received a demand Show Cause Notice from the Authority for FY 2018-19 demanding Rs 363,07,96,980 (Tax of Rs 181,53,98,490 and penalty of Rs 181,53,98,490) under applicable provisions of TNGST Act, 2017 & CGST Act, 2017 on account of reporting of IGST on club membership services instead of CGST and SGST and sudden decrease of IGST payment since August"
Reporting of IGST on club membership services instead of CGST and SGST
The company reportedly classified club membership services under IGST, whereas they should have been classified under CGST and SGST. This misclassification triggered a significant tax discrepancy under the state’s jurisdiction.
Sudden Decrease in IGST Payments
According to the authorities, there was a sudden and unexplained decrease in IGST payments by the company since August 2023, following a change in the registered office address of the company. This drop in payments raised suspicion and contributed to the tax investigation.
Mahindra Holidays Plans Legal Action Over GST Show Cause Notice
Mahindra Holidays has announced its intention to take legal steps to challenge the ₹363 crore GST demand issued by the Tamil Nadu tax authorities. In a filing with the BSE, the company stated that it does not expect to have any significant financial impact from this issue.
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