Sri Lotus Developers Faces GST Show Cause Notice

Sri Lotus Developers and Realty Ltd has received a Show Cause Notice (SCN) from tax authorities concerning fiscal years 2020-21, 2021-22, and 2023-24. The notice alleges potential tax, interest, and penalty liabilities under CGST and MGST Acts. The company has stated the notice will not materially impact its financials or operations and intends to contest the allegations. Notably, the tax portion of the alleged liabilities has already been paid under protest.

Notice Details

The company announced on April 28, 2026, that it received the SCN in Form GST DRC-01. The notice covers potential liabilities for fiscal years 2020-21, 2021-22, and 2023-24. The alleged tax liability for FY21-22 alone is ₹3.58 crore, with corresponding alleged interest and penalties totaling ₹2.63 crore and ₹3.58 crore respectively. Liabilities for other years include ₹0.07 crore for FY20-21 and ₹0.01 crore for FY23-24.

Company's Position

Sri Lotus Developers has paid the tax component of the alleged demand under protest, signaling disagreement with the authorities' findings. The company plans to submit a formal response and contest the allegations. It has explicitly stated that the SCN will not have a material impact on its financials, operations, or other activities.

Understanding Tax Notices

A Show Cause Notice is issued when tax authorities identify potential discrepancies or non-compliance. It proposes a demand for taxes, interest, and penalties. While the company contests these allegations, the resolution of such proceedings can involve financial costs and potential liabilities if the ruling is adverse.

Company Background

Sri Lotus Developers and Realty Ltd is a Mumbai-based real estate developer specializing in ultra-luxury and luxury redevelopment projects, primarily in the western suburbs. The company was formerly known as AKP Holdings Limited before changing its name to Sri Lotus Developers and Realty Limited in December 2024.

Market Landscape

Operating in the competitive Indian real estate sector, Sri Lotus Developers faces rivals such as DLF Ltd, Oberoi Realty Ltd, and Macrotech Developers (Lodha Group). These competitors reported significant financial results in FY24, including DLF's ₹163 crore net profit and Oberoi Realty's ₹143 crore. Sri Lotus Developers is now managing this specific tax compliance issue.

Future Outlook

Investors and stakeholders will be tracking the company's submission of its detailed response and supporting documentation to the Show Cause Notice. Monitoring any further communications from the Assistant Commissioner of State Tax and updates on the company's strategy for contesting the GST demand will be key.