ONGC gets Rs.22 Crore GST Demand Order for Non-payment of GST

The state-owned Oil and Natural Gas Corporation Ltd (ONGC) announced on Monday (March 17) that it has received a Goods and Services Tax (GST) demand order for Rs.22 crore from the Joint Commissioner of State Tax, Circle C at Jodhpur, for the period 1st April 2020 to 14th May 2020.

“An Order dated 25.02.2025 has been received through email today i.e.17.03.2025 from the Office of Joint Commissioner, State Tax, Circle C, Jodhpur for the Period of 01.04.2020 to 14.05.2020,” according to an ONGC regulatory filing.

The order issued under Sections 73 and 50 of the CGST Act of 2017 includes a GST recovery demand of Rs.11.31 crore, interest of Rs.9.50 crore, and a penalty of Rs.1.13 crore. The dispute is over the claimed failure to pay GST on royalties for other joint venture (JV) partners Vedanta and CEHL, each of whom owns a 35% participating stake in the unincorporated JV for the Pre-NELP block RJ-ON-90/1.

ONGC, which has been paying GST under protest for its own 30% share, contends that GST does not apply to royalty and that it is not required to pay the tax on behalf of its JV partners. The company indicated that the issue is already being litigated, and that it will review the order and file an appeal.

“The company believes that: (a) GST is not leviable on royalty, and (b) ONGC is not required to pay GST on royalty for other JV partners’ shares under the provisions of the PSC and GST Act. It is important to note that the issue of leviability and shareability in this case is now being litigated,” the company stated.

Given the size of ONGC’s operations, the order is expected to have no substantial financial or operational impact. “There is no significant impact given the size and scale of the Company’s operations. “The Company will review the order and file an appeal in the appropriate forum,” it added.

Shares of Oil and Natural Gas Corporation Ltd were traded at Rs.229.75, up by Rs.4.30, or 1.91%, on the BSE.