GST Show Cause Notice of ₹23.79 crore received for FY 2022-23 from Karnataka tax authority

Received a GST Show Cause Notice on Sept 29, 2026 from Karnataka commercial taxes dept for FY 2022-23.

Wed 30 Sep 2026

Show Cause Notice Date

September 29, 2026

Proposed Demand Amount

₹237,950,666

Tax Component

₹137,543,738

Interest Component

₹86,652,554

Penalty Component

₹13,754,374

What happened

Le Travenues Technology (ixigo) received a Show Cause Notice in Form GST DRC-01 dated September 29, 2026, from the Office of the Assistant Commissioner of Commercial Taxes (Audit) - 3.6, DGSTO-3, Bangalore, alleging contravention of the KGST/CGST Act, 2017 and IGST Act, 2017. The notice relates to FY 2022-23.

Amount involved

• Aggregate proposed demand: ₹237,950,666/-
• Tax: ₹137,543,738/-
• Interest: ₹86,652,554/-
• Penalty: ₹13,754,374/-

The dispute in simple terms

The company provides bus reservation and booking services through its online platform. As an e-commerce operator under Section 9(5) of the CGST Act, it collects and pays GST at 5%, the rate applicable to passenger transportation by bus (HSN 996422).

The company is also registered under other HSN codes for IT-related and online advertisement services, where GST is 18%. The tax authorities contend that because of this registration, the company should also pay 18% on bus passenger transportation instead of 5%. The authority alleges the company did not declare the correct tax liability in its GST returns, with the differential tax recoverable along with interest under Section 50 and penalty under Section 122(2)(a).

Company's position

The company says the proposed demand is not tenable and that its services qualify as passenger transport taxable at 5%. It states it has a strong case on merits and points to a similar notice for FY 2021-22 on the same issue involving a demand of approximately ₹3.05 crore, which the authority dropped after the company's submissions and personal hearing.

The company will, with its tax advisors, submit a comprehensive response within the prescribed timelines to contest the notice.

How to read this

A show cause notice is a preliminary step asking the company to explain its position; it is not a final order. The outcome depends on the authority's decision after hearing the company's reply. Investors may note the size of the proposed demand relative to the company's financials while tracking further updates on this matter.

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