Pune: GAIL (India) Ltd, a state-controlled energy company, has received a significant relief as the Pune Commissioner (Appeals) has withdrawn the entire customs duty demand of Rs 934 crore. This decision has led to a positive market response, with GAIL’s stock surging by 2 percent after the announcement. At 1:30 pm, the stock was trading 1.44 percent higher at Rs 115.90 per share on the NSE.
The key development stems from the Pune Commissioner’s decision to direct the assessing authority to re-evaluate the Bill of Entries, considering the exemption of Special Additional Duty (SAD) on liquefied natural gas (LNG). Additionally, the Commissioner has advised levying custom duty based on the final invoice value instead of the Bill of Lading quantity.
GAIL’s regulatory filing stated that this favorable ruling would result in a significant reduction in the company’s contingent liability by Rs 934.01 crore. The customs duty demand was initially raised by the customs authority in Pune for the period spanning September 2017 to March 2022.
Elaborating on the issue, GAIL highlighted that the Customs Authority in Dapoli had previously confirmed a demand of Rs 934.01 crore, including penalties and interest. This demand pertained to the imposition of SAD and customs duty on differential quantity while finalizing provisionally assessed Bill of Entries in relation to the import of LNG by the company from September 2017 to March 2022 at Dabhol Port in Ratnagiri.
In response to the customs authority’s decision, GAIL had filed an appeal before the Commissioner (Appeals) Pune, contesting the aforementioned orders. The recent outcome of this appeal has been in GAIL’s favor, leading to the withdrawal of the entire customs duty demand.
The positive news has had an immediate impact on GAIL’s stock performance, driving it up by 2 percent. The stock’s year-to-date rise of 20 percent and a remarkable surge of over 30 percent in the past year underscore the company’s resilience and market confidence in its operations. This decision not only provides financial relief to GAIL but also strengthens its position within the energy sector.
