ONGC Faces Rs 111 Crore Service Tax Demand

The Oil India Natural Gas Corporation Limited, one of the well-known oil and gas companies, has recently informed the stock exchanges (NSE and BSE) about the receipt of a Tax Order on 22.07.2025 from the Commissioner of CGST & Central Excise, Navi Mumbai Commissionerate. The order demands over Rs 111 Crore from ONGC.

As per the GST Department, ONGC must pay the following demands:

• Rs 45,15,10,556 for services under “Survey & Exploration of Mineral, Oil or Gas” and “Support Services of Business or Commerce“.
• Rs 66,40,37,025 for “Support Services of Business or Commerce“.
• Applicable Interest amount from the date the tax became due till payment.
• Penalty equal to the tax amount under Sections 76 and 78 of the Finance Act.
• Another penalty of Rs 5,000 under Section 77(2) of the same Act.

However, the company does not agree with the tax demand and believes that these services were done outside India’s taxable territory, i.e., beyond 12 nautical miles from the coast.

The services should be classified under “Mining Services” or “Supply of Tangible Goods for Use Services“, which were not taxable at that time. The company will analyse the order and challenge it by filing an appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, within 3 months. Additionally, the company also stated that the above demand has no major impact on the operations of the company.