CASTROLIND

Shares of Castrol India are higher by nearly 4 percent on July 14, after the company said in an exchange filing that the Customs Excise & Service Tax Appellate Tribunal (CESTAT) has ruled in its favour, in a Rs 4,131 crore tax dispute with the Maharashtra Sales Tax Department (MSTD). "...on 11 July 2025 CESTAT pronounced an order in favour of the Company rejecting the appeals of MSTD for the period of 9 years i.e. from 2007-08 to 2015-16 and for 2017-18," the lubricant maker said on July 11. The clarity in the tax case has supported investor interest in the shares, which is higher on volumes that are 4x the one-month average. Over the last one year, the shares are down by 9 percent but on a YTD basis the shares are higher by 15 percent. In 2023, the shares of Castrol India were higher by 46 percent. Castrol India has not made any provision in its books for the amount involved in the dispute i.e. Rs 4,131 crore, since the likelihood of an economic outflow was 'considered as remote', the company said, citing that there have been decisions of tribunal / courts in favour of industry in such cases, supporting Castrol India's position. "The Company’s tax payment methodology in respect of the goods sold is adequately supported by robust legal grounds/precedents and in Company’s opinion the said demands are unjustified. Thus considering the favourable orders from MVAT Tribunal and based on the legal advice the Company has not made any provision in the books for the year ended December 31, 2024 and the possibility of outflow of resources embodying economic benefits is considered to be remote," Castrol India had said in its annual report in FY24. The company had received demand orders amounting to Rs 4,131 crore for the period 2007-08 to 2017-18 (10 years) from the MSTD over movement of goods from its warehouses in Maharashtra to Clearing and Forwarding Agents (CFAs) in other states.