ONGC receives ₹26.75 Crore demand & penalty order from CGST Surat; to appeal
ONGC received an order from CGST Surat for ₹26.75 Crore on SAED, interest, and penalty for the period July 2022 to July 2023. The demand is related to the 10% Participating Interest of M/s Invenire Petrodyne Ltd. in a UJV block. ONGC will appeal the order, stating no significant impact on its operations.
The order involves a demand and penalty of ₹26.75 crore. While ONGC states no significant impact due to its scale, such regulatory orders and potential litigation can have medium-term financial and operational implications, including legal costs and management attention.
The company has received a significant demand and penalty order from the tax authorities, which is a negative development. Although they plan to appeal, the initial order itself is unfavorable.
Oil and Natural Gas Corporation Limited (ONGC) has received an order dated 07.01.2026 from the Commissioner CGST & Central Excise, Surat. The order includes a demand of ₹26,75,89,270/- on account of Special Additional Excise Duty (SAED) for the period 01.07.2022 - 31.07.2023, applicable interest on the SAED amount, and an imposition of penalty amounting to ₹26,75,89,270/-.
The allegation pertains to the non-payment of SAED on crude oil production under an Unincorporated Joint Venture (UJV) in the Pre NELP Block CB-OS-02. ONGC, M/s Vedanta Ltd., and M/s Invenire Petrodyne Ltd. are partners with 50%, 40%, and 10% Participating Interest (PI) respectively, with Vedanta Ltd. as the operator. SAED attributable to ONGC and Vedanta Ltd.'s PI has been paid. The impugned demand is specifically for the 10% PI of M/s Invenire Petrodyne Ltd.
ONGC maintains that it is not liable to pay SAED, interest, and penalty on crude oil production for the 10% PI held by M/s Invenire Petrodyne Ltd. This is because ONGC, as a non-operator, does not qualify as a “manufacturer” under Central Excise law. The company plans to review the order and file an appeal before the appropriate appellate authority within the stipulated time. ONGC stated that there is no significant impact on its financial, operational, or other activities in view of the size and scale of its operations.
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