Lemon Tree Hotels material subsidiary Berggruen Hotels Private Limited received a GST demand notice totaling ₹5.63 crore from Bengaluru tax authorities on September 8, 2026.

The intimation, issued in Form GST DRC-01A by the Office of the Deputy Commissioner of Commercial Taxes (Audit), Bengaluru, ascertains tax, interest, and penalty under Section 73(5) of the CGST Act, 2017 for the financial year 2022-23.

Demand Breakdown

The total proposed liability comprises principal tax, accumulated interest, and a fixed penalty. The specific components are detailed below:

Alleged Violations

The tax authority cited five primary compliance failures for FY22-23 that triggered the demand:

• Mismatch between turnover reported in GSTR-3B and GSTR-1, leading to alleged short declaration of taxable turnover.
• Non-submission of purchase registers and supporting invoices to substantiate claimed Input Tax Credit (ITC).
• Failure to provide ageing and payment details for outstanding trade payables, resulting in proposed ITC reversal for amounts unpaid beyond 180 days.
• Non-substantiation of nil-rated or exempt turnover reported in GSTR-1, which was treated as taxable turnover.
• Non-substantiation of scrap sale income, resulting in alleged non-discharge of applicable GST liability.

What the Numbers Show

Interest constitutes approximately 41% of the total demand, while the penalty represents less than 7%. This structure indicates the liability is driven primarily by the principal tax shortfall and the duration of non-payment, rather than punitive measures alone.

Next Steps

Berggruen Hotels is evaluating the grounds raised in the intimation. The subsidiary intends to file its response and objections in Part B of Form GST DRC-01A within the prescribed timeline ending September 21, 2026. Further legal recourse may be pursued if a Show Cause Notice or adjudication order is subsequently issued.

Lemon Tree Hotels stated there is no material impact on financial operations except to the extent of the specified amount.

Nomura India Investment Fund Mother Fund has reduced its stake in Lemon Tree Hotels to 3.075% following a significant share disposal.

The fund sold 15,869,284 shares, representing a 2.003% reduction in its total holding. The transaction was executed through the secondary market, with the final sale recorded on September 7, 2026.

Transaction Details

The disposal brings Nomura’s total holding down from 40,233,907 shares (5.078%) to 24,364,623 shares. The last reporting date for the previous holding was April 30, 2024.

The acquirer group includes The Nomura Trust and Banking Co., Ltd. as trustee and the Employees Provident Fund Board managed by Nomura Asset Management Malaysia Sdn Bhd. None of these entities belong to the promoter or promoter group of the target company.

Regulatory Disclosure

The disclosure was filed under Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The filing was submitted to the Bombay Stock Exchange, National Stock Exchange of India, and Metropolitan Stock Exchange of India on September 8, 2026.

The total paid-up equity capital of Lemon Tree Hotels remains at 792,246,464 shares. The net disposal of shares occurred between the last reporting date and the date of the latest transaction.