Oil India Limited Tax Litigation Updates
GST on Royalty Payments Litigation (Case 1)
Opposing Party: Union of India & Others
Date of Initiation: Case transferred to Supreme Court on 03-02-2024 (T.P.(C) No. 000300-000304/2024)
Subject Matter: Dispute regarding applicability of Goods and Services Tax (GST) on royalty payments for assignment of right to use natural resources. GST was implemented w.e.f. 01st July 2017, and as per CBIC FAQs, GST is payable on royalty. However, Oil India contends that GST is not payable on royalty paid under the Oil Fields (Regulation & Development) Act, 1948.
Legal History: Company filed a writ petition in Hon'ble Gauhati High Court challenging the levy. Hon'ble Gauhati High Court granted interim stay on GST on royalty payments made by the Company in the State of Assam until further orders vide its interim order dated 2nd November 2021.
Current Status: Cases pending before Hon'ble Gauhati High Court along with cases pending before Hon'ble Rajasthan High Court on the subject matter were transferred to Hon'ble Supreme Court and admitted on 03-02-2024 (T.P.(C) No. 000300-000304/2024).
Recent Development (29.07.2026): As per order dated 29.07.2026, counsel for Oil India Limited stated that OIL would deposit GST as per within six weeks. This shall be subject to the final outcome of the proceedings. The petitions were directed to be tagged with C.A. No. 10560/2025 (Udaipur Chamber of Commerce and Industry vs Union of India).
Assam Land Tax Litigation (Case 2)
Opposing Party: State of Assam
Date of Initiation: 06-06-2020 (T.C.(C)No. 232/2020 before Hon'ble Supreme Court of India)
Subject Matter: State of Assam amended the Assam Taxation (on Specified Lands) Act, 1990 vide the Assam Taxation (on Specified Lands) (Amendment) Act, 2004. As per the Amendment Act, an oil producer is required to pay Rs. 200/- per metric tonne for Crude Oil and Rs. 100/- per thousand cubic meters for Natural Gas of annual productivity of the land.
Financial Impact: Government of Assam raised a demand of approximately Rs. 2484.81 crores for the years 2005-2024 under the impugned Amendment Act. Company challenged the demand as ultra vires of the Constitution of India.
Recent Development (29.07.2026): The State of Assam informed the Court that the State wishes to withdraw the specific land tax imposed on mineral oil and will move an appropriate bill in the State Legislature for this purpose. Based on this statement, the Hon'ble Supreme Court disposed of Transferred Case (C) No. 232 of 2020 as well as Writ Appeal No. 599/2005 pending before the Gauhati High Court. All pending interlocutory applications were also disposed of.