ONGC Receives GST Demand Notice of ?6.72 Crore for IGST Payment Discrepancies

A tax demand of Rs 6.72 crore has been imposed by the GST authorities on the Oil and Natural Gas Corporation Limited (ONGC), India’s largest oil and gas producer. The company in an exchange filing cited that the demand, which contains recovery of tax, interest, and penalties, relates to the IGST liabilities of the company for specific months in 2017.

The order u/s 74(9) of the Central Goods and Services Tax (CGST) Act, 2017, has been issued by the tax authorities quoting the difference in the IGST payments of the ONGC for July, October, and November of 2017. The total demand consists of-

• Interest Charges: ONGC apart from the tax recovery sought to file Rs 1.64 crore in interest. The same charge u/s 50(1) of the CGST Act, shows the delay in the IGST amount payment.
• Penalty imposition: Also a penalty of tax demanded Rs 2.54 crore has been imposed u/s 122(2)(b) of the CGST Act, read with Section 74(1). The same penalty specifies the stringency of the alleged non-compliance.
• IGST Recovery: The main part of the demand is Rs 2.54 crore which the authorities claim ONGC owes for the three months under review. The same amount was asked under section 74(1) of the CGST Act, showing the serious compliance difficulties.

In the company’s filing, it cited that the GST payment was made within time. However, the delay in precise emerged because of the technical issues of the offshore GST registration (other territory) which was not mapped initially on the GST portal via the related authorities. Subsequently, the company outlined that the delay has no impact on its scale of operations.