GST Shock: Mahindra Holidays Faces Rs. 363 Crore Tax Notice

Mahindra Holidays and Resorts India Limited (MHRIL) issued a formal communication to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on June 29, 2025, under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), informing that it has received a Show Cause Notice (SCN) dated June 28, 2025, from the State Tax Officer, Anna Salai Central III, Chennai.

In addition to the Show Cause Notice (SCN), the company has also received the summary of the SCN bearing reference number ZD3306253218585 via email at 15:08 (IST) to inform them that an order has been uploaded on the GST portal. The notice demanded the company pay a total of Rs. 363,07,96,980 (INR 181,53,98,490 as tax and INR 181,53,98,490 as a penalty) under applicable provisions of the TNGST Act, 2017, and CGST Act, 2017.

According to the authorities, the company has faced this demand because it reported IGST (Integrated Goods and Services Tax) on its club membership services, while it should have reported CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax). These issues started after August 2023, when the company changed its registered office location. After this change, there was a reduction in IGST payments, which concentrated the attention of the tax department.

Even though the demand notice charges a huge amount, the company still says this SCN has no material financial impact. This is because the company believes that the SCN will not lead to an actual payment or penalty in the end. As the company consulted a legal counsel, who advised the company that SCN to have any material financial impact on the company. The company is taking appropriate steps to pursue legal remedies and challenge the demand before the relevant authorities.