Mahanagar Gas Limited (MGL), a prominent player in the natural gas distribution sector, has received a significant setback in its ongoing GST dispute. The company recently disclosed that it has been served with a GST appeal order confirming a liability of Rs. 54.33 crore, along with applicable interest and a 100% penalty for the period from July 2017 to March 2022.

Details of the GST Liability

The GST liability stems from a demand order received from the joint commissioner of CGST and Central Excise Mumbai East Commissionerate. The order confirms a GST liability amounting to Rs. 54,32,95,413 plus applicable interest and a 100% penalty for an equivalent amount. This liability falls under section 74(1) of the Central Goods and Services Tax (CGST) Act, 2017, read with corresponding provisions of the Maharashtra Goods and Services Tax (MGST) Act, 2017, and section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017.

Appeal Process and Company's Stance

MGL had previously filed an appeal against the initial demand order with the Commissioner, CGST and Central Excise Appeals-II, Mumbai. However, on August 7, 2025, the Commissioner disposed of the appeal and confirmed the earlier GST liability along with applicable interest and penalty.

In response to this setback, MGL has announced its intention to file an appeal against the order with the GST Appellate Tribunal. The company received the order on August 25, 2025, and is taking swift action to challenge the decision.

Financial Implications and Company's Assessment

Despite the substantial amount involved, MGL remains optimistic about its position. Based on the company's assessment and legal opinion obtained, MGL believes it has a strong case and does not expect any outflow of economic resources as a result of this matter.

Nature of the Dispute

The GST liability pertains to non-payment of GST under Reverse Charge Mechanism (RCM) on the reinstatement/restoration charges paid to the Municipal Corporation of Greater Mumbai and other local bodies under MMRDA. These charges were for digging roads to lay underground pipelines for the transportation of CNG/PNG during the period from July 2017 to March 2022.

Market Impact

While the GST liability represents a significant amount, MGL's confident stance and immediate action to appeal may help mitigate investor concerns. The company's assertion that it does not expect any economic outflow suggests that MGL is well-prepared to handle the legal challenges ahead.

As this situation continues to unfold, stakeholders will be closely watching the proceedings at the GST Appellate Tribunal and any potential impact on MGL's financial position and operations in the coming months.

Mahanagar Gas Limited (MGL), a leading city gas distribution company, has announced significant changes to its leadership team, appointing two industry veterans to key positions on its Board of Directors.

New Deputy Managing Director

Ajay Sinha has been appointed as the Deputy Managing Director of Mahanagar Gas Limited for a five-year term, effective August 23, 2025. Sinha brings over three decades of experience in the Oil and Gas industry to his new role.

An Electrical Engineer from the University of Roorkee with an MBA from IIT Delhi, Sinha has a diverse background in the City Gas Distribution (CGD) sector. His expertise spans:

• Marketing
• Engineering and planning
• Business development
• Regulatory affairs
• Corporate communication
• Project development

Prior to joining MGL, Sinha served as the Head of Marketing at GAIL Gas Limited, a wholly-owned subsidiary of GAIL (India) Limited. He has also held the position of Joint Adviser in the Petroleum and Natural Gas Regulatory Board, where he played a crucial role in developing and implementing regulations for CGD and natural gas pipelines.

New Independent Director

In a parallel move, Pankaj Kuchhal has been appointed as a Non-Executive Independent Director for a three-year term, also starting from August 23, 2025. Kuchhal brings 38 years of downstream Oil & Gas experience to the board.

Kuchhal's most recent role was as CEO of IHB Limited, where he led the implementation of India's longest cross-country LPG pipeline. His expertise includes:

• Automation of retail outlets
• POL terminals/depots
• Contracts & procurement for city gas distribution and cross-country pipelines

Board Approval and Shareholder Ratification

Both appointments were approved by MGL's Board of Directors on August 22, 2025, based on recommendations from the Nomination and Remuneration Committee. These appointments are subject to shareholder approval at the company's next general meeting.

Leadership Transition

The new appointments come as MGL bids farewell to Sanjay Shende, who ceased to be the Deputy Managing Director due to the withdrawal of his nomination by GAIL (India) Limited, as per the company's Articles of Association.

Company's Future Direction

These strategic appointments align with Mahanagar Gas Limited's focus on strengthening its leadership team with experienced industry professionals. The diverse expertise of Sinha and Kuchhal is expected to contribute significantly to MGL's growth strategies and operational excellence in the evolving energy landscape.

Mahanagar Gas Limited continues to demonstrate its commitment to delivering clean, reliable, and affordable energy solutions. The company recently completed three decades of operations and has been expanding its gas pipeline networks, CNG infrastructure, and industrial and commercial volumes.

As MGL moves forward with these new additions to its leadership, the company appears well-positioned to navigate the challenges and opportunities in the city gas distribution sector, focusing on sustainability, digital transformation, and long-term value creation for its stakeholders.