Oil India Limited Provides Updates on Ongoing Tax Litigations
Oil India Limited (OIL) updated on tax litigations. Regarding GST on royalty, OIL will deposit dues within six weeks, subject to final outcome. For Assam's land tax, the state will withdraw the tax, leading to disposal of related cases by the Supreme Court.
The litigations involve significant amounts (approx. ₹2484.81 crore in one case) and relate to core operational taxes. While the state's withdrawal of the land tax is a positive development, the GST litigation is ongoing, and OIL's conditional deposit suggests potential financial implications depending on the final ruling.
The announcement provides updates on ongoing tax litigations without a definitive resolution yet. While there are positive developments like the state's intention to withdraw a tax, OIL's commitment to deposit GST is conditional on the final outcome, maintaining a neutral stance.
Oil India Limited (OIL) has provided an update on its ongoing tax litigations, referencing previous disclosures made on August 14, 2023, and subsequent quarterly filings, with the latest being on July 2, 2026, for the quarter ended June 30, 2026.
The first litigation concerns Goods and Services Tax (GST) on royalty payments. While GST is generally payable on royalty for the use of natural resources, OIL contends that GST is not applicable on royalty paid under the Oilfields (Regulation & Development) Act, 1948. The Hon'ble Gauhati High Court had previously granted a stay on royalty payments in Assam. These cases, along with those in Rajasthan, have been transferred to the Hon'ble Supreme Court. On July 29, 2026, OIL informed the Supreme Court that it would deposit the GST as per law within six weeks, subject to the final outcome of the proceedings. These petitions are tagged with C.A. No. 10560/2025.
The second litigation involves the State of Assam, which amended the Assam Taxation (on Specified Lands) Act, 1990. This amendment requires oil producers to pay ₹200 per metric tonne for crude oil and ₹100 per thousand cubic meters for natural gas. The Government of Assam had raised a demand of approximately ₹2484.81 crore for the years 2005-2024 under this act, which OIL has challenged as unconstitutional. On July 29, 2026, the State of Assam informed the Supreme Court of its intention to withdraw the specific land tax on mineral oil and move an appropriate bill in the State Legislature. Based on this statement, the Supreme Court disposed of the Transferred Case (C) No. 232 of 2020 and related writ appeals.
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