Castrol India Wins ₹4,131 Crore Tax Dispute Against Maharashtra Sales Tax Department

14 Jul 2025 , 11:11 AM

Castrol India Ltd has received a favourable ruling from the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in a long-running tax dispute with the Maharashtra Sales Tax Department (MSTD). The case involved claims amounting to ₹4,131 crore under the Maharashtra Value Added Tax (MVAT) framework.

The dispute dates back to the financial years between 2007–08 and 2017–18. Authorities had argued that Castrol’s transfer of goods from its Maharashtra-based facilities to Clearing and Forwarding Agents (CFAs) in other states should be treated as inter-state sales, citing pre-existing customer orders.

Castrol, however, maintained that the goods were not moved under prior orders and that its tax practices adhered to legal provisions. Over time, the company secured favourable rulings from the MVAT Tribunal for all ten years under review.

Despite this, the MSTD escalated the matter, appealing to CESTAT for nine of those ten years excluding 2016–17. In its decision issued on July 11, 2025, CESTAT dismissed the appeals and upheld the earlier rulings in Castrol’s favour.

The company confirmed that there would be no financial impact from the verdict, as it had not set aside any provisions for the disputed amount. Castrol said it had assessed the chances of economic outflow as remote and had accordingly not accounted for the ₹4,131 crore claim in its books.

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