BPCL gets Rs 1,817 crore tax demand order; to challenge before CESTAT

State-run Bharat Petroleum Corporation Ltd (BPCL) has received an order from the Commissioner of Central Tax and Central Excise, Kochi, for a total demand of ₹1,816.65 crore, according to a filing with the BSE.

In a post-market hours exchange filing on Monday, BPCL said the Adjudicating Authority passed the order on February 21, 2026.

The total financial implication of Rs 1,816.65 crore comprises a duty demand of Rs 476.94 crore, applicable interest of approximately Rs 1,339.70 crore up to date and a penalty of Rs 95,000.

According to the filing, the matter pertains to 19 showcause notices issued by the Central Excise Department over the determination of transaction value under the Central Excise law for the period between September 2004 and May 2010.

The company said a significant portion of the confirmed demand pertains to the pre-merger period of Kochi Refineries Ltd (KRL), specifically from September 2004 to August 2006, which had been pending adjudication.

The Adjudicating Authority held that BPCL and KRL were related parties and ruled that the Refinery Gate Price could not be used for excise valuation.

"The AA (Adjudicating Authority) ruled that BPCL and KRL were related parties, so Refinery Gate Price cannot be used for excise valuation and department’s valuation under Rule 11 read with Rule 9 of Central Excise Valuation Rules, 2000 is valid. After the merger, BPCL – Kochi Refinery used Rule 7 of Central Excise Valuation Rules, 2000 (highest‑quantity depot price), but the department applied the highest value of the entire fortnight to all clearances under Rule 11 read with Rule 7 of Central Excise Valuation Rules, 2000," the filing stated.

BPCL said it will analyse the order and file an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Earlier in the day, shares of BPCL settled 1.83 per cent higher at Rs 372.55.