Max Estates Limited has received a show cause notice proposing a demand of ₹2.59 crore from the Uttar Pradesh State Tax Department. The notice relates to Goods and Services Tax (GST) matters for FY23 and was issued under Section 73 of the Central GST Act.

The notice, dated September 26, 2026, was issued by the Office of the Deputy Commissioner, State Tax, Sector-3, Gautam Buddha Nagar. It pertains to Max Ventures and Industries Limited, which merged into Max Estates effective July 31, 2023. The proposed demand primarily concerns GST return and reconciliation discrepancies.

Breakdown of Proposed Demand

The total proposed liability of ₹2.59 crore comprises three distinct components: principal tax, interest, and penalty. The table below details the specific financial implications disclosed in the regulatory filing.

Nature of Dispute and Legal Status

The dispute centers on differences in annual returns, reconciliation statements, input tax credit adjustments, and credit note details for FY23. The matter is currently at the show cause notice stage, meaning no final demand or order has been passed by the authorities. Max Estates stated it is reviewing the matter and will file a reply in accordance with applicable laws.

What the Numbers Show

A significant portion of the proposed demand is non-taxable in nature. The combined interest (₹97.25 lakh) and penalty (₹26.65 lakh) amount to ₹1.24 crore, which constitutes nearly 48% of the total proposed liability of ₹2.59 crore. This indicates that a substantial part of the exposure stems from procedural delays or compliance gaps rather than just the underlying tax principal. The company noted that there is no impact on its operations or other activities at this stage.

Max Estates Limited reported pre-sales of ~₹2,100 crore in Q2FY27, a significant rise from ₹156 crore in the corresponding quarter last year.

The real estate developer announced total pre-sales of ~₹3,200 crore for the first half of fiscal year 2027 (H1FY27). The substantial year-on-year growth reflects robust buyer confidence across its National Capital Region (NCR) projects.

Sales Performance and Unit Growth

The company sold 274 units in Q2FY27 compared to 24 units in Q2FY26. This represents an increase of more than 11 times in unit volume. The sales figures include contributions from the Max One project, which accounted for ₹584 crore in Q2FY27.

A key driver was Estate 361, which recorded sustenance sales of ₹1,747 crore in H1FY27. Of this total, ₹962 crore was booked in Q2FY27 alone. The portfolio spans price points from ₹3.50 crore to ₹35 crore, catering to diverse segments including millennial-focused residences and senior living options.

Collections and Financial Health

Max Estates achieved collections of ~₹560 crore in Q2FY27. The company noted that annual collections typically range between 20–25% of the sales value. This cash flow structure enables the developer to undertake construction activities without incurring incremental debt for its residential projects.

What the Numbers Show

The divergence between the massive jump in pre-sales (₹2,100 crore) and current collections (₹560 crore) highlights the lag between booking and cash realization typical in real estate. However, the company’s assertion that collections cover construction costs suggests a self-funding model for ongoing projects, reducing reliance on external debt despite the rapid expansion in order book value.

Future Outlook and Portfolio Expansion

The company plans major launches in Noida and Gurugram during Q3 and Q4 of FY27. Max Estates aims to add 2 million sq. ft. to its residential segment annually. In the commercial sector, the portfolio remains 100% leased with annual rentals exceeding ₹160 crore. The company projects an annuity rental income potential of over ₹700 crore on a 100% basis across delivered, under-construction, and acquisition-stage assets over the next five years.