Kolte-Patil Developers Receives ₹103.82 Crore GST Show Cause Notice from Maharashtra Tax Authority
Kolte-Patil Receives ₹103.82 Crore GST Show Cause Notice from Maharashtra Tax Authority
Kolte-Patil Developers received a show cause notice dated 19 June 2026 from the Office of the Assistant Commissioner of State Tax, Mumbai, demanding a total GST liability of ₹103.82 crore for financial years 2020-21 to 2025-26. The notice, issued under Section 74(1) of the CGST/MGST Act, 2017, pertains to the purchase of TDR and construction services in redevelopment projects.
Scope and Components of the Demand
The notice, dated 19 June 2026, pertains to financial years from 01-04-2020 to 31-03-2026 and includes interest and penalties. The total demand stands at ₹103.82 crore, inclusive of interest and penalties. The specific penalty component amounts to ₹46.35 crore.
The assessed activities include the purchase of Transferable Development Rights (TDR), construction services provided to society members under redevelopment projects, and development rights procured from society members in lieu of construction services. These transactions are common in Mumbai's redevelopment ecosystem, where societies engage developers to reconstruct aging buildings and provide new residential units in exchange for the right to sell additional built-up area.
Escalation from Earlier Intimation
The notice follows an earlier intimation received on 04 June 2026 under Section 74/74A of the same Act, which the company had previously disclosed to the stock exchanges. The recent communication increases the penalty amount by ₹39.40 crore. This escalation represents a material shift from the initial intimation to a formal show cause notice carrying evidentiary weight.
Company's Response and Position
The company states the demand is erroneous and will contest it legally, adding that it does not expect any material financial impact. The company has reasonable grounds to defend its position and intends to take appropriate legal action within the permissible timelines.
Context on Section 74 Notices
Under Section 74(1) of the CGST Act, where a proper officer believes tax has not been paid, been short paid, or input tax credit has been wrongly availed by reason of fraud, wilful misstatement or suppression of facts to evade tax, the officer serves a show cause notice requiring the person to explain why they should not pay the specified amount along with interest and a penalty equivalent to the tax.
Section 74 notices carry extended timelines compared to standard demand provisions, reflecting the severity of the allegations underpinning the demand. A Section 74 notice must indicate specific reasons for alleging suppression, fraud, or misstatement; mere numerical discrepancies do not suffice.
Developer Background
Founded nearly 3 decades ago, incorporated in 1991 and guided by the philosophy of 'Creation, not construction', Kolte-Patil Developers Ltd is a leading real estate company with dominant presence in the Pune residential market. The company has developed and constructed over 68 projects including residential complexes, IT parks, integrated townships, and commercial complexes, covering a saleable area of approximately 36 million square feet across Pune, Mumbai and Bengaluru.
Headquartered in Pune, KPDL is listed on NSE and BSE (BSE: 532924, NSE: KOLTEPATIL). In recent quarters, the company has accelerated redevelopment activities in Mumbai, a market known for higher price realisations but complex GST treatment of development rights and construction services.