GAIL India Slapped with 143 Cr Penalty for Non-Payment of GST on Corporate Guarantee

The GAIL (India) Limited, one of the leading companies in retailing, distribution, and marketing of Natural Gas, is facing a heavy GST penalty of Rs 143.08 Crore levied by the GST department.

The company, on December 11, 2025, informed the stock exchanges under the mandatory disclosure under Regulation 30 of SEBI LODR Regulations, 2015, that it has received an Order-in-Original from the Additional Commissioner, CGST, Delhi South Commissionerate demanding GST on Corporate Guarantee.

As per this order, received on December 10, 2025, at 5:00 PM, the company has failed to pay the GST on the Corporate Guarantee issued to the bank on behalf of subsidiaries and Joint Ventures without consideration.

Corporate Guarantee is a formal agreement where one company agrees to be responsible for another company’s debt or loan if the primary borrower defaults. It is treated as a supply of services, attracting GST. Since the company allegedly failed to pay such GST, the tax department has levied a penalty of Rs 143,08,40,592 on the company.