ONGC Hit with Rs. 124.98 Crore OID Cess Demand Order:

ONGC Hit with Rs. 124.98 Crore OID Cess Demand Order Oil and Natural Gas Corporation (ONGC) Ltd, the biggest crude oil and natural gas company in India, has disclosed the receipt of a GST demand order. The company has informed the Stock exchanges, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) under Regulation 30 of SEBI (LODR) Regulations, 2015, that the Principal Commissioner of CGST & Central Excise, Mumbai South Commissionerate, has issued a notice to the company. The order demands ONGC to pay OID (Oil Industry Development) Cess of Rs. 124,98,40,817, along with interest and penalty of an equal amount.

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The department has issued this order claiming that ONGC has wrongly calculated and paid the OID Cess. As per the tax department, from October 2022 to May 2023, ONGC calculated its OID Cess based on the Indian Crude Basket Price, which was higher than the transaction price. OID Cess is a duty of excise imposed on domestically produced crude oil in India. This resulted in an excess payment of Cess during that period. However, ONGC adjusted this amount while making the payment for the month of June 2023. As per ONGC, it has correctly remitted OID cess and that it has not paid less, as the company paid extra cess; therefore, it adjusted it while making payment. The company does not agree with these claims and is planning to challenge the order by filing an appeal to the appellate authority. Additionally, the company has stated that the above tax demand will not affect its operations.