MRPL Faces ₹7.38 Crore Tax Penalty; Plans to Appeal Against Order

Mangalore, January 31, 2025 – Mangalore Refinery and Petrochemicals Limited (MRPL) [NSE: MRPL, BSE: 500109] has disclosed a tax demand and penalty order issued by the Office of the Commissioner of Central Excise & Central Tax, Mangaluru Commissionerate. The order pertains to a Goods and Services Tax (GST) liability amounting to ₹7.38 crore for the period of July 2017, along with an equivalent penalty and applicable interest charges.

Key Highlights of the Order​

• Issued By: Additional Commissioner of Central Excise & Central Tax, Mangaluru.
• Reference Number: MLR-GST-000-SDN-ADC-SC-27-2024-25.
• Tax Demand: Recovery of ₹7,38,38,561 under Section 17(2) of the CGST Act, 2017.
• Interest Liability: Applicable interest under Section 50(3) read with Section 74(1) of the CGST Act, 2017.
• Penalty: ₹7,38,38,561, imposed under Section 74(1) read with Section 122(2)(b) of the CGST Act.

Alleged Violation​

The tax authority claims that MRPL failed to reverse CGST input tax credit (ITC) for November 2017, linked to service tax amounts carried forward from the previous tax regime. However, MRPL maintains that the tax credit was rightfully transitioned under TRAN 1 and taken as per the CGST Act provisions.

Company's Response​

MRPL has stated that the financial impact of this order is not significant, given the company’s large scale of operations. The company intends to appeal the order before appropriate legal forums within the prescribed timeframe.

Investor Outlook​

While the imposed tax liability and penalty could have short-term implications, MRPL’s stance of legal recourse suggests a prolonged resolution process. Investors will closely watch the outcome of the appeal and its potential financial impact.