State-run refiner Bharat Petroleum Corporation Limited (BPCL) has received an excise duty demand of Rs 1,816.65 crore, equal to 18,166.5 million (mn) or 18.17 billion (bn), from the Commissioner of Central Tax and Central Excise, Kochi, over valuation disputes at its Kochi refinery. The order, dated 21 February 2026, covers transactions from September 2004 to May 2010. The company disclosed the receipt of the order and said it will challenge the demand.

The demand comprises excise duty of Rs 476.94 crore, interest of Rs 1,339.70 crore and a penalty of Rs 95,000, which correspond to 4,769.4 million (mn) or 4.77 billion (bn) and 13,397.0 million (mn) or 13.40 billion (bn) for the tax and interest components respectively. The penalty is administrative and small compared with the tax and interest.

The demand arises from 19 show cause notices under the Central Excise Valuation Rules, 2000, relating to Kochi Refineries Limited, later merged with BPCL. The adjudicating authority held that BPCL and Kochi Refineries Limited were related persons and disallowed the transaction value adopted by the company, applying valuation on the basis of the highest fortnight price across clearances rather than BPCL's method. BPCL had used the highest quantity depot price after the merger, which the authority rejected.

BPCL said it will analyse the order and file an appeal before the Customs, Excise and Service Tax Appellate Tribunal and did not disclose any provision in its accounts or a timeline for the appeal. The matter will proceed through the appellate process and the outcome may affect the company, including potential accounting adjustments, investor sentiment and regulatory scrutiny. The company will pursue legal channels to seek a resolution and will continue to monitor developments.