Chalet Hotels Ordered to Pay ₹8.88 Crore After Tax Dispute Ruling

Chalet Hotels Ltd announced that the Karnataka High Court has dismissed its petition challenging revised property tax rates for its Bengaluru Marriott Hotel Whitefield. The company is now required to pay approximately ₹8.88 crore, a sum that Chalet Hotels assured will not adversely affect its operational or financial performance.

The Writ Petition filed by Chalet Hotels contested the revised property tax rates set by authorities for the Bengaluru Marriott Hotel Whitefield. The court's decision on April 14, 2026, validates these rates, which include statutory escalation.

This court order concludes a property tax dispute that has seen previous legal challenges. In February 2026, the Karnataka High Court had previously stayed a ₹39.56 crore property tax notice. Earlier, in August 2023, Chalet Hotels disclosed pending litigations, including a ₹25.6 crore demand notice from the BBMP for property tax on the same hotel covering 2008-2016. An interim stay had previously directed the company to pay property tax at 50% of the enhanced amount plus the original rate.

The company will incur an expense of approximately ₹8.88 crore to settle this tax liability. This marks an unfavorable ruling for Chalet Hotels in its legal challenge. Future property tax assessments for the Bengaluru asset are expected to follow the court-approved rates.

The primary immediate risk is the cash outflow of ₹8.88 crore, though Chalet Hotels maintains it will not affect overall financial performance or operations. Past tax disputes also suggest potential for continued scrutiny of tax compliance.

Chalet Hotels operates within the competitive Indian hospitality sector, facing peers such as Indian Hotels Company Ltd, EIH Ltd, and Lemon Tree Hotels Ltd. Property tax disputes are not uncommon in the industry, with local authorities frequently imposing various levies. The Delhi High Court, for example, upheld higher property tax rates for luxury hotels in September 2025, citing their affluent clientele. A similar situation occurred in 2016 when JW Marriott in Bengaluru paid ₹5.59 crore in property tax following pressure after the BBMP seized furniture.