EIH Limited disclosed that the Assistant Commissioner, Mumbai has levied a penalty of Rs 90,69,113 under Section 74 of the Central Goods and Service Tax Act, 2017 on two of its premium hotels. The penalty order dated December 31, 2025, affects Trident Nariman Point and The Oberoi Mumbai, both flagship properties of the hospitality company.

Penalty Details and Scope

The GST penalty pertains to Input Tax Credit (ITC) claims on input services spanning multiple financial years. The regulatory action covers a significant period of the company's operations:

Regulatory Compliance and Next Steps

The company has committed to taking appropriate action within the statutory time limit as prescribed under the GST regulations. EIH Limited's Company Secretary, Lalit Kumar Sharma, made the disclosure on January 5, 2026, in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The financial impact of the penalty order is limited to the extent of the penalty amount imposed by the Assistant Commissioner. The company has indicated that it will pursue necessary legal remedies available under the statutory framework.

Previous Corporate Developments

Prior to this penalty disclosure, EIH Limited had received positive news with CARE Ratings Limited assigning the company an issuer rating of CARE AA+ with a stable outlook in December 2025. The rating reflected the company's general creditworthiness and financial stability in the hospitality sector.

The contrast between the positive credit rating and the current GST penalty highlights the regulatory challenges faced by hospitality companies in managing complex tax compliance across multiple financial years.

EIH Hotels has been slapped with a significant GST penalty, highlighting compliance challenges in the hospitality sector's tax obligations. The company's Maidens Hotel, operated by EIH Limited, has been penalized ₹57.98 lakh by Delhi GST authorities for non-payment under the Reverse Charge Mechanism (RCM) on foreign travel agent commissions.

Penalty Details

The penalty was imposed by the Deputy Commissioner, Delhi, for alleged non-compliance with GST obligations over a period spanning from FY2019 to FY2023.

Nature of Non-Compliance

The penalty relates specifically to non-payment of GST under the Reverse Charge Mechanism on import of services. The issue centers around commissions paid to foreign travel agents, a common practice in the hospitality industry where hotels work with international booking platforms and travel agencies to attract overseas customers.

The Reverse Charge Mechanism requires the recipient of services to pay GST instead of the supplier, particularly relevant when dealing with foreign service providers who may not be registered under Indian GST laws.

Potential Company Response

While EIH Hotels has not yet disclosed its response strategy, companies in such situations typically consider:

• Filing an appeal against the order within the prescribed statutory time limit
• Reviewing and strengthening their compliance processes to prevent future issues

Impact and Implications

The financial impact appears to be limited to the penalty amount imposed. However, this development underscores the ongoing scrutiny of GST compliance in the hospitality sector, particularly regarding international transactions and service imports that fall under the Reverse Charge Mechanism.

This incident serves as a reminder for companies in the hospitality industry to carefully manage their tax obligations, especially when dealing with international partners and service providers.