ONGC Hit with ₹125 Cr Tax Demand—CGST Commissioner Issues Cess Order

Oil and Natural Gas Corporation Ltd. (ONGC) has received a formal order from the Principal Commissioner of CGST & Central Excise, raising a tax demand of ₹1.25 billion (₹125 crore). The demand pertains to cess liabilities linked to ONGC’s oil and gas exploration activities, as per regulatory disclosures and exchange data.

 

The order follows a detailed investigation into ONGC’s royalty payments and service tax compliance, particularly in relation to its operations across Tamil Nadu’s Cauvery Basin. The Directorate General of GST had earlier flagged discrepancies in the treatment of royalty as taxable consideration, prompting the issuance of this demand.

 

ONGC is expected to challenge the order through appropriate legal channels, citing precedents and exemptions applicable to upstream oil producers. The development adds to the list of legacy tax disputes faced by India’s largest oil explorer, even as it continues to invest in domestic energy security and offshore expansion.

 

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Source: Indian Kanoon – ONGC vs. Commissioner of GST & Central Excise