Sula Vineyards Limited has received a GST order that demands payment of differential tax on restaurant services provided at its vineyard estate in Nashik. The order was issued on October 30, 2026 and received by the company at its Nashik location on November 8, 2026. The company disclosed this to the stock exchanges on November 9, 2026.
The authority that issued this order is the Assistant Commissioner at the CGST and Central Excise office, Nashik-I Division. The order covers the financial year 2022-23.
The Two Restaurants at the Centre of This Dispute
Sula Vineyards operates two dining outlets at its vineyard estate in Nashik — 'RASA' and 'Tasting Room'. Both are located within the Sula Vineyard estate itself, as part of the company's wine tourism and hospitality experience.
For the financial year 2022-23, Sula had been paying GST at the rate of 5% on the restaurant services provided at these two outlets. This is the GST rate applicable to restaurant services in general.
However, the tax authority has taken a different view. It has alleged that these restaurants are operating at what are called "specified premises" — a category under GST law that attracts a higher tax rate. The authority's position is that since RASA and Tasting Room fall under this category, they should have been taxed at 18% GST instead of 5%.
What "Specified Premises" Means in GST
Under GST rules, restaurant services are generally taxed at 5%. But when a restaurant is located in a hotel where the room tariff is above a certain threshold — that is, in a "specified premises" — the GST rate jumps to 18%. The logic is that a restaurant attached to a premium hotel is considered a higher-end service.
The authority has taken the view that RASA and Tasting Room, being located within the Sula Vineyard estate, qualify as restaurants in specified premises. Sula, on the other hand, had been treating these as regular restaurants and paying the 5% rate accordingly.
The gap between the two rates is 13 percentage points. The authority has calculated this differential across all the restaurant services billed by RASA and Tasting Room during FY 2022-23 and arrived at the demand figure.
The Exact Demand: Tax, Penalty and Interest
The differential tax demand for FY 2022-23 comes to ₹1,54,34,022. This amount is split equally between central GST and Maharashtra state GST — ₹77,17,011 under CGST and ₹77,17,011 under MGST.
In addition to the tax demand, a penalty of ₹15,43,402 has also been imposed. The order also directs recovery of applicable interest on the differential tax, though the exact interest figure has not been stated in the order itself — it will be calculated separately as applicable.
Putting the tax and penalty together, the total confirmed demand excluding interest is ₹1,69,77,424.
Full Breakup of the Demand
| Particulars | Amount (₹) |
|---|---|
| Differential Tax (CGST) | 77,17,011 |
| Differential Tax (MGST) | 77,17,011 |
| Total Differential Tax | 1,54,34,022 |
| Penalty | 15,43,402 |
| Interest | As applicable |
| Total (excluding interest) | 1,69,77,424 |
Sula Does Not Agree With the Order
Sula Vineyards has made clear that it does not agree with the findings and the demand raised in this order. The company has said it will file an appeal before the appellate authority against this Order-in-Original. It expects a outcome in its favour at the higher forum.
The company has also stated that this demand does not have any material impact on its financials. It is not expected to affect the company's operations or any other activities either.
This Is Not Sula's First GST Matter
GST-related disputes over the classification of restaurant services are not uncommon in the hospitality and food service sector in India. The question of whether a restaurant qualifies as being in "specified premises" has been a point of contention between businesses and tax authorities across multiple industries, particularly for companies that offer bundled hospitality experiences like resort stays, wine tours, and dining together.
For Sula Vineyards, whose business model is built around wine tourism — where visitors come to the estate, taste wine, stay at the resort, and dine at the restaurants — this classification question has a direct bearing on how its restaurant revenues are taxed.
The appeal process can take time, and the final outcome will depend on how the appellate authority interprets the applicable GST provisions with respect to the nature of the premises where RASA and Tasting Room operate.
About Sula Vineyards
Sula Vineyards Limited is one of India's largest wine producers. Its winery and vineyard estate is located in Nashik, Maharashtra, which is the country's most prominent wine-growing region. The company sells wine under multiple brands and also operates a wine tourism business that includes resort stays, vineyard tours, and dining experiences at the estate. It is listed on both BSE and NSE.