Shipping Corp Gets Rs.146 Cr Relief in Service Tax Dispute
State-owned Shipping Corporation of India Ltd (SCI) on Thursday (August 14) said it has secured a favourable ruling from the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, in a long-standing dispute over service tax on demurrage income.
The case stemmed from an earlier order dated October 3, 2016, which had ruled in SCI's favour for the period between July 2012 and September 2015. The Commissioner of Central Excise & Service Tax LTU, Mumbai, subsequently appealed against the order before CESTAT, involving a principal demand of Rs.49.44 crore plus applicable interest.
In its latest decision, CESTAT dismissed the department’s appeal, paving the way for SCI to reduce approximately Rs.146 crore from its contingent liabilities. This amount comprises the principal demand of Rs.49.44 crore and interest of Rs.96.56 crore calculated as of June 30, 2025.
The company had previously disclosed the amount as a contingent liability in its financial statements. Following the ruling, the contingent liability will be reduced accordingly.
First Quarter Results
Net profit surged 22.8% year-on-year (YoY) to Rs.366.3 crore from Rs.298.3 crore in the first quarter of FY25. However, revenue slipped 13.1% to Rs.1,316 crore against Rs.1,514 crore in the year-ago period.
At the operating level, EBITDA dipped 3.8% to Rs.489.6 crore in the April-June quarter over Rs.509 crore year-on-year. SCI's EBITDA margin widened to 37.2% in the reporting quarter compared to 33.6% last year.
Shares of Shipping Corporation of India Ltd ended at Rs.206.60, down by Rs.1.85, or 0.89%, on the BSE.
