Deepak Fertilisers Receives MVAT Penalty Order of Rs. 74.89 Crore from Pune Tax Authority
Deepak Fertilisers & Petrochemicals Corporation Limited disclosed receipt of a penalty order from the Deputy Commissioner of State Tax, Nodal-3, Pune, raising a total MVAT demand of Rs. 74,89,20,261/- (tax Rs. 31,04,33,269/-, interest Rs. 36,08,78,675/-, penalty Rs. 7,76,08,317/-). The company disputes the order, stating the tax department incorrectly applied a 13.5% MVAT rate on Natural Gas sales to its subsidiary instead of the applicable 3% rate, and intends to challenge the order at an appropriate forum. The company has confirmed no material impact on its financials or operations.
*this image is generated using AI for illustrative purposes only.
Deepak Fertilisers & Petrochemicals Corporation Limited has disclosed, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, that it has received a penalty order from the Deputy Commissioner of State Tax, Nodal-3, Pune. The order was collected by the company in person on 11th May 2026 at 11:30 am, and the disclosure was made to the stock exchanges on 12th May 2026.
Details of the Tax Demand Order
The order, bearing reference no. PUN-NOD-E-307/27040000023V/VAT 2026-27/B-242 and dated 31st March 2026, raises a total MVAT demand of Rs. 74,89,20,261/-. The demand is broken down into three components as detailed below:
| Particulars: | Amount (Rs.) |
|---|---|
| Tax: | 31,04,33,269/- |
| Interest: | 36,08,78,675/- |
| Penalty: | 7,76,08,317/- |
| Total Demand: | 74,89,20,261/- |
Nature of the Dispute
The company has stated that there is no violation or contravention on its part. According to the disclosure, the tax department erred in levying an MVAT rate of 13.5% on the sale of Natural Gas to the subsidiary company, instead of the applicable rate of 3% under MVAT. The company has clarified that the rate of 3% was applicable for the purchase of natural gas for captive consumption against Proforma A, which was procured and submitted for this transaction by the subsidiary company.
Company's Position and Next Steps
Deepak Fertilisers and Petrochemicals Corporation Limited has asserted that the aforesaid demand is not tenable and is liable to be set aside in appeal. The company has stated it intends to challenge the order at an appropriate forum. The key details of the order and the company's stated position are summarised below:
| Parameter: | Details |
|---|---|
| Issuing Authority: | Deputy Commissioner of State Tax, Nodal-3, Pune |
| Order Reference No.: | PUN-NOD-E-307/27040000023V/VAT 2026-27/B-242 |
| Order Date: | 31st March 2026 |
| Date of Receipt: | 11th May 2026 |
| Nature of Dispute: | Incorrect MVAT rate applied on sale of Natural Gas to subsidiary |
| Company's Stance: | Demand not tenable; to be challenged in appeal |
| Financial Impact: | No material impact on financials, operations, or other activities |
The company has confirmed that there is no material impact on its financials, operations, or other activities as a result of this order. The disclosure was signed by Rabindra Purohit, VP – Legal, Compliance & Company Secretary, on 12th May 2026.
Historical Stock Returns for Deepak Fertilisers & Petrochemicals
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.47% | -1.49% | +23.03% | -6.60% | -1.31% | +367.06% |
If Deepak Fertilisers loses the appeal, how could a Rs. 74.89 crore MVAT liability impact its balance sheet and dividend distribution plans?
Are there other Indian fertiliser or petrochemical companies facing similar MVAT rate disputes on natural gas transactions with subsidiaries that could signal a broader tax enforcement trend?
How might the outcome of this appeal influence the structuring of inter-company natural gas sale agreements across the Indian petrochemical sector?
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