According to a stock exchange filing, Sunteck Realty Ltd has received a show-cause notice (SCN) from the Department of Goods and Services Tax for FY23, involving a demand of ₹59.44 crore, including interest and penalty. The notice was issued under Section 73 of the GST Act for tax liability on procurement of Transferable Development Rights (TDR) from the open market, which were originally granted by local bodies. As reported by CNBC TV18, the company believes the notice has no merit and expects no material financial impact from it. The notice was received by the company on September 24, 2026, and the company has filed this disclosure under Regulation 30 of SEBI Listing Regulations.
According to the company's statement, Sunteck Realty believes no GST is applicable to such transactions as they do not constitute a supply of goods or services and are therefore outside the scope of GST. The company will file a reply before the Office of the Deputy Commissioner of State Tax, Mazgaon, Mumbai, disputing the demand. As reported by CNBC TV18, the company noted that the notice has considered an amount that is twice the actual amount and was issued despite a detailed, comprehensive audit for the financial year already having been concluded by the tax authorities. The company has highlighted two specific errors in the notice: the amount is calculated as twice the actual value, and the notice was raised despite a detailed comprehensive audit already being concluded by tax authorities for the same financial year.
According to the company's disclosure, there is no impact on its financial, operational or other activities arising from the show-cause notice. Sunteck Realty said it was studying the notice and evaluating its compliance obligations. The company added that it will take all necessary action to present and defend its case before the adjudicating authorities. The demand of ₹59.44 crore includes interest and penalty components alongside the principal tax liability.
As reported by CNBC TV18, shares of Sunteck Realty Ltd ended at ₹282.25, down by ₹1.90, or 0.67%, on the BSE following the announcement of the GST notice. The market reaction reflects investor concerns about the potential financial implications of the tax demand despite the company's assessment that it has no merit. The company's explicit claim that the notice considers the amount two times the actual figure suggests a potential overstatement of the base tax demand, while the existence of a concluded comprehensive audit for FY23 prior to this notice indicates a procedural conflict between the audit findings and the subsequent demand raised under Section 73.
