Oil India Ltd’s second quarter net profit has seen an 81% drop due to a one-time provisioning for tax liability, according to a filing with the stock exchange. The company’s standalone net profit for the July-September period was reported at Rs 325.31 crore, down from Rs 1,720.53 crore in the same period last year.
As the nation’s second largest state-owned explorer and producer of oil and natural gas, Oil India Ltd (OIL) made a provision of Rs 2,655.57 crore towards a disputed GST liability. The company has been facing a service tax demand for the period of March 2016 to June 2017, seeking tax on the royalty it paid on crude oil and natural gas to state governments. Oil India has disputed this tax demand and has taken the matter to the Gauhati High Court, which has granted a stay on the GST on royalty payments until further orders. Despite this, the company has made a provision of these disputed taxes, including interest amounting to Rs 2,655.57 crore from March 2016 to September 30, 2023, citing prudence and conservative principles, as well as the uncertainty involved.
In the quarter under review, EBITDA rose to Rs 3,197.74 crore from Rs 2,743.03 crore a year ago, and turnover rose to Rs 5,913.31 crore from Rs 5,772.88 crore. However, the company received USD 86.86 for every barrel of crude oil it produced in the second quarter of the current fiscal, compared to a realisation of USD 100.59 per barrel. Net oil realisation stood at USD 75.49 per barrel after paying for windfall profit tax. Oil production saw a 5.6% increase to 0.835 million tonnes, while gas production fell to 0.81 billion cubic metres from 0.823 bcm last year.
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