(PTI)
State-run oil refiner Indian Oil (IOC) said it would contest a `4,000-crore excise duty demand on it, as the tax department’s claim “stems from difference of interpretation” of the Excise Act. The demand was based on the charge that the company evaded excise duty on ethanol-blended motor spirit (EBMS) sale.
IOC received the demand notice from the Pune division of directorate general of GST Intelligence in April. The notice referred to investigation carried out by the department during 2016 on sale of EBMS by oil companies, and concluded that these firms had evaded tax on the assumption that as the sale price of EBMS and MS (MS–petrol) are same, thus excise duty has been collected on the ethanol portion of EBMS.
In a statement, the oil marketing company has contended that EBMS is an exempt product for the purpose of levy of excise duty. “The amount on the invoice is towards the price of the EBMS. Therefore, Indian Oil has not collected any amount representing as ‘excise duty’ on sale of EBMS,” IOC said.
