Here’s how ONGC, Oil India get impacted by the GST changes

Exploration services such as seismic surveys, geological and geophysical data analysis, drilling operations, mine planning, and other professional or technical assistance will now be taxed at 18%, up from 12% earlier. These services will continue to be eligible for input tax credit.Brokerage firm ICICI Securities said that exploration services form a major part of upstream production costs. The 6% increase in GST on exploration-related activities is therefore negative for upstream players like ONGC and Oil India.

For ONGC, exploration costs (including well drilling) stood at ₹19,500 crore in FY25, accounting for 13% of standalone revenue.

A 6% rise in these costs translates into a 1% increase in overall expenses, with an estimated impact of less than ₹0.7 per share on EPS, or around 2% of standalone FY26E EPS.For Oil India, standalone exploration costs are estimated at ₹1,980 crore in FY25, or 9% of revenue. A 6% escalation would raise expenses by about 0.5% and dent standalone EPS by roughly 1.5%.

The GST Council on Wednesday night approved sharp cuts to existing tax rates and approve a two-slab structure in a move aimed at boosting consumption in the country.

The new GST rates will take effect on September 22. This is also a confirmation of multiple CNBC-TV18 newsbreaks that were reported a few weeks earlier.

Meanwhile, shares of Oil India ended 2.22% lower, while those of ONGC and RIL settled 1.28% and 0.98% lower, respectively, on Thursday.