New Delhi – Oil and Natural Gas Corporation Limited has received an order from the Principal Commissioner of CGST and Central Excise, Mumbai South Commissionerate, raising a demand of approximately 125 crore in Oil Industry Development Cess along with an equivalent penalty and applicable interest.

The demand relates to the month of June 2023, where the authorities alleged that ONGC underpaid cess due to a shift from using the Indian Crude Basket Price to transaction value for calculations. ONGC had earlier paid in excess for the period October 2022 to May 2023 and had adjusted that in June, which it maintains was a valid approach.

ONGC stated that it believes the cess was correctly paid and that the imposed interest and penalty are not applicable. The company intends to file an appeal before the Central Excise and Service Tax Appellate Tribunal in Mumbai within the prescribed three-month timeline.

According to ONGC, the financial impact of this matter is not significant given the company’s overall scale of operations.

Image Caption ONGC prepares appeal after CGST demands 125 crore in cess and penalties linked to June 2023 payment adjustment

Meta Description ONGC to challenge CGST demand of 125 crore in OID Cess and penalties. Company cites prior excess payments and plans appeal at CESTAT.

Keywords ONGC, OID Cess, CGST order, Mumbai South, penalty demand, June 2023, crude price, SEBI LODR, tax appeal, public sector oil company