Gujarat Energy Limited (GEL), formerly Gujarat Gas Limited, has issued a guidance note for its shareholders regarding the apportionment of the cost of acquisition for GEL and GSPL Transmission Limited (GTL) shares. This follows the composite scheme of amalgamation and arrangement sanctioned by the Ministry of Corporate Affairs. The guidance details how shareholders should allocate their original cost of GEL shares to both GEL and the newly issued GTL shares for capital gains tax purposes, effective from May 1, 2026.
Shareholder Guidance on Post-Demerger Cost Apportionment
Gujarat Energy Limited (GEL), formerly Gujarat Gas Limited, has released a crucial communication for its shareholders concerning the apportionment of the cost of acquisition for its equity shares and those of the newly formed GSPL Transmission Limited (GTL). This guidance is a direct result of the Composite Scheme of Amalgamation and Arrangement, which was sanctioned by the Ministry of Corporate Affairs and became effective on May 1, 2026.
Key Details of the Scheme
The Scheme involved the demerger and transfer of the Gas Transmission Business Undertaking from GEL to GTL. In consideration, GTL issued new equity shares to GEL shareholders. The effective date of this scheme was May 1, 2026. A record date of July 2, 2026, was set to determine eligibility for the new shares. Shareholders of GEL received one equity share of GTL for every three equity shares of GEL they held, in a specific share entitlement ratio.
Mechanism for Cost Apportionment
To comply with the Income-Tax Act, 2025, shareholders are advised to apportion their total cost of acquiring GEL shares (acquired prior to the record date of July 2, 2026) between GEL and GTL. The cost is to be divided based on the following percentages:
- Gujarat Energy Limited (Erstwhile Gujarat Gas Limited): 70.66%
- GSPL Transmission Limited: 29.34%
For instance, if 900 GEL shares were bought at INR 400 each, totaling INR 3,60,000, the cost would be apportioned as INR 2,54,376 for 900 GEL shares and INR 1,05,624 for the 300 GTL shares received.
Tax Implications and Advice
The issuance of GTL shares under this scheme is generally not considered a taxable transfer. However, the date of acquisition for GTL shares will be deemed the same as the acquisition date for the original GEL shares. Shareholders are strongly advised to consult their tax advisors for personalized guidance on calculating capital gains or losses upon the sale of these shares.
Source: BSE
