Bengaluru: Real estate major Brigade Enterprises Limited has disclosed that it has received a Show Cause Notice (SCN) from the Directorate General of GST Intelligence (DGGI), Bengaluru Zonal Unit, proposing a GST demand of ₹80.52 crore in connection with the valuation of construction services provided under certain Joint Development (JD) projects.
In a regulatory disclosure to the National Stock Exchange (NSE) and BSE, Brigade stated that the SCN was issued on December 2, 2025, under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act) read with the Karnataka GST Act, 2017. The company has been asked to explain the valuation and GST treatment of certain real estate projects within 30 days.
GST Demand & Project-wise Allegations
The SCN alleges that Brigade may have undervalued construction services provided to landowners in exchange for development rights through Joint Development Agreements (JDAs). The notice includes the following specific financial claims:
1. Brigade Parkside North
- Alleged taxable value: ₹91,80,22,265 (Rupees Ninety-One Crore Eighty Lakh Twenty-Two Thousand Two Hundred and Sixty-Five only)
- Proposed GST demand: ₹11,01,62,672 (CGST ₹5,50,81,336 + SGST ₹5,50,81,336)
- Brigade has already paid ₹1,38,82,820 in GST (CGST + SGST).
2. Brigade Senate-1 (Wing-1 & Wing-2), Brigade Senate-2, Brigade Deccan Heights & Brigade North Ridge Neo
- Combined alleged taxable value: ₹386,14,61,590 (Rupees Three Hundred Eighty-Six Crore Fourteen Lakh Sixty-One Thousand Five Hundred and Ninety only)
- Proposed GST demand: ₹69,50,63,086 (CGST ₹34,75,31,543 + SGST ₹34,75,31,543)
- Brigade has already paid ₹27,29,09,678 in GST towards these projects (CGST + SGST).
Interest & Appropriation Issues
- The SCN also seeks to appropriate ₹5,59,77,257 already paid as interest (reported in GSTR-3B filings).
What Brigade Must Respond To
The notice requires Brigade to explain why:
- The full value of construction services should not be treated as taxable under Section 9 of the CGST Act;
- The time of supply should not be re-determined;
- The taxable values and GST demands on the projects listed should not be re-assessed;
- Interest and penalties should not be levied under Section 50 and Section 74/122 of the CGST Act. x
Brigade’s Response & Stand
Brigade Enterprises has stated that it believes the SCN has no merit and will make detailed submissions to the concerned GST authorities within the stipulated timeline. The company also clarified that the SCN currently has no impact on its financial results, operations, or business activities.
A GST Show Cause Notice is a procedural step, not a final ruling. The final tax liability, if any, will depend on how the GST authorities adjudicate Brigade’s response.
Investor Takeaway
- This notice highlights increased GST scrutiny on valuation practices in real estate JDAs.
- Brigade’s firm position and prompt disclosure align with SEBI (LODR) compliance.
- No immediate financial impact has been recognised — but the matter may evolve depending on the outcome of the GST process.
ಇದನ್ನೂ ಓದಿ: ಬ್ರಿಗೇಡ್ ಎಂಟರ್ಪ್ರೈಸಸ್ಗೆ ₹80.52 ಕೋಟಿ ಜಿಎಸ್ಟಿ ಶೋಕಾಸ್ ನೋಟಿಸ್; ಆರೋಪಗಳನ್ನು ತಳ್ಳಿ ಹಾಕಿದ ಕಂಪನಿ
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