New Delhi: State-owned ONGC has reported its highest quarterly net profit in over four-and-a-half-years on sharp rise in prices for oil and gas it produced.
Its net profit of Rs 6,143.88 crore in the first quarter of the 2018-19 fiscal was 58.1 per cent higher than Rs 3,884.73 crore in the year-ago period, Oil and Natural Gas Corp said in a statement here on Thursday.
The net profit is highest since December 2013 when earnings had hit Rs 7,126 crore.
ONGC realised USD 71.48 for every barrel of crude oil it produced in the April-June quarter of the current fiscal, up 47.6 per cent over USD 48.42 a barrel in the year-ago period.
For natural gas, it got USD 3.06 per million British thermal unit as compared to USD 2.48 per mmBtu.
ONGC said its crude oil production dropped 5.3 per cent to 5 million tonnes in the quarter. This was partly made up by a 2.5 per cent rise in output from joint venture fields, that pumped 0.8 million tonnes oil.
Natural gas production was however 3.4 per cent higher at 5.9 billion cubic metres.
Its revenue from operations rose 42.7 per cent to Rs 27,212.83 crore for the quarter under review.
The country's largest oil and gas producer said it deposited Rs 2,695 crore service tax and GST under protest as it believes such taxes are not applicable on royalty paid by the firm to the government.
Oil producers like ONGC are required to pay 12.5 per cent royalty on crude oil to the state governments for on-land areas and at 10 per cent to the central government for shallow water areas.
The tax department is seeking payment of service tax on these royalty payments.
"In the year 2017-18, the company had received show-cause notices at various work centres on account of service tax along with interest and penalty, on royalty on crude oil and natural gas levied under Oil Field (Regulation & Development) Act, 1948," ONGC said.
ONGC said it had worked out service tax for the period from April 1, 2016 to June 30, 2017 along with interest of Rs 2,294 crore. Further, GST along with interest thereon has been worked out of Rs 1,608 crore.
"Based on legal opinion obtained by the company, service tax/GST on royalty is not applicable. The company is contesting the same at appropriate authorities and accordingly the same is considered as a contingent liability. However, as an abundant caution, the company has deposited service tax, GST, and interest under protest amounting to Rs 2,695 crore," ONGC said.
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