New Delhi: The Government has cut the windfall tax to zero from Rs 4,100 ($50.13) per tonne that was imposed on petroleum crude. The cut is effective from today, according to a government notification.
Early this month, the windfall tax on domestic crude oil was reduced to Rs 4,100 per tonne from Rs 6,400 per tonne. Whereas, the government left the windfall tax on petrol, diesel, and aviation turbine fuel (ATF) unchanged at zero.
Before this, the government reimposed the windfall profit tax on domestically produced oil from zero to Rs 6,400 per tonne. The government also scrapped the export duty on diesel.
The tax rates are reviewed every 15 days based on the average oil prices in the last two weeks.
The windfall profit tax is calculated by taking away any price that the producers are being paid above a set limit.
India, in July 2022, joined a growing number of nations that tax the super-normal profits of energy companies. It had imposed the windfall tax on crude oil producers and extended the levy on exports of gasoline, diesel, and ATF after private refiners wanted to make gains from robust refining margins in overseas markets.
Imposition of the windfall tax was expected in order to compensate for the reduction in excise duty on diesel and petrol and to provide some relief to the consumers. However, the reduction in the windfall tax from the initial levels is expected to reduce the realisation for the government.
