Royalty is a regulatory fee & not a consideration & is not compensatory in nature

Oil and Natural Gas Corporation Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai) In a significant judgment dated 09-01-24, the Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) addressed the contentious issue of whether the royalty paid by ONGC under a petroleum license is subject to service tax. The Tribunal rendered a comprehensive decision with key findings. Firstly, it categorically held that royalty is a regulatory fee and not a consideration, emphasizing its non-compensatory nature. Secondly, the Tribunal clarified that there is no assignm...