The notice was issued by the Directorate General of Goods & Services Tax Intelligence (DGGI), Mumbai Zonal Unit, according to an exchange filing by Max Healthcare.
The DGGI has alleged a GST liability of ₹55.23 crore, along with applicable interest.
It has also proposed a penalty of ₹55.23 crore under Sections 74(1) and 74A(5)(ii) of the Central Goods and Services Tax Act, 2017, and another ₹55.23 crore under Section 122(2)(b).
Together, the alleged tax liability and proposed penalties amount to about ₹165.7 crore, excluding interest.
Max Healthcare said its management is preparing submissions against the demand.
What does the notice mean?
The notice does not amount to a final tax order or establish that Alps Hospital owes the entire ₹165.7 crore.
A show-cause-cum-demand notice sets out the tax authority’s allegations and proposed demand and gives the recipient an opportunity to contest them before a final order is passed.Alps Hospital can therefore submit its response to the DGGI challenging the alleged tax liability and penalties. The eventual financial impact will depend on the outcome of those proceedings.
The dispute centres specifically on the tax treatment of variable management fees, on which the DGGI has alleged that GST was not paid.
Max Healthcare has not provided further details in its disclosure on the nature of the management-fee arrangements or the period to which the alleged liability relates.
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