India’s prime oil and fuel producer ONGC posted a shock loss in the March quarter after it revamped ₹12,100 crore provision for a contested tax legal responsibility.
Oil and Natural Gas Corporation (ONGC) reported a internet loss of ₹247.7 crore in the January-March quarter as in comparison with a internet revenue of ₹8,859.54 crore a yr again, in accordance with an organization assertion.
Service tax division at varied work centres had raised a requirement for cost of service tax on the royalty the corporate paid to the state and central authorities on crude oil and pure fuel it produces from under floor. The firm challenged the calls for in courts.
While the matter is pending in courts, “as an abundant caution, the company has deposited the disputed service tax and GST on royalty along with interest under-protest amounting to ₹11,558 crore up to March 31, 2023,” the notes to the accounts stated, including ₹1,862 crore in the direction of penalty and different variations in the tax calls for has additionally been disclosed as contingent legal responsibility.
ONGC stated it would proceed to contest the tax earlier than varied boards based mostly on the authorized opinion, as per which the service tax/GST on royalty in respect of crude oil and pure fuel shouldn’t be relevant.
“The company has reviewed the entire issue of disputed service tax and GST on royalty and has decided to make a provision towards these disputed taxes as a prudent and conservative practice. Accordingly, during the quarter and year ended March 31, 2023, the company has provided ₹12,107 crore towards disputed taxes of ST/GST on royalty for the period from April 1, 2016 to March 31, 2023 together with interest thereon,” it stated in the assertion.
This, it stated, “adversely impacted the profitability” for the fourth quarter of 2022-23 fiscal yr and the complete monetary yr FY23.
Revenue was up 5.2% at ₹36,293 crore in January-March.
For the complete fiscal yr 2022-23 (April 2022 to March 2023), ONGC posted a internet revenue of ₹38,829 crore, down 3.7% from ₹40,306 crore internet incomes in the earlier monetary yr.
The agency obtained $77.12 for each barrel of crude oil it produced in the January-March quarter and $91.90 per barrel in FY23. This in contrast with $94.98 per barrel realisation in January-March 2022 and $76.62 a barrel in 2021-22.
Gas value was up at $8.57 per million British thermal unit in Q4 and $7.34 in FY23. This in contrast with $2.90 per mmBtu in Q4 of the earlier fiscal and $2.35 in FY22.
The firm paid a complete dividend of 225% (₹11.25 per share of face worth of ₹5 every) with a complete payout of ₹14,153 crore.
ONGC stated it produced 1% much less 21.5 million tonnes of crude oil FY23 whereas fuel output was down 1.5% at 21.3 billion cubic meters.
“The decrease in oil and gas production is mainly due to delay in implementation of KG-98/2, cluster-II project and less than envisaged production from WO-16 and Cluster-7 and reservoir issues in S1-VA fields,” the assertion stated.
The agency’s abroad unit too produced much less crude oil at 6.35 million tonnes in FY23 as in comparison with 8.1 million tonnes in the earlier yr. However, internet revenue rose to ₹1,700 crore as a result of larger crude oil costs when put next with ₹1,589 crore internet revenue in FY22.
ONGC stated it made a complete of 8 discoveries (5 in onland and three in offshore) throughout FY 2022-23 in its operated acreages. “Out of these, 3 (2 in onland and 1 in offshore) are prospects and 5 (3 in onland and 2 in offshore) are pools (of older fields),” the assertion stated.
