Govt cuts windfall tax, export tax on fuel
Effective from Jan 17, the new tax rates will benefit cos engaged in crude oil, diesel & ATF as they will be able to increase margins from overseas exports
New Delhi: The government has reduced the windfall profit tax levied on domestically-produced crude oil as well as on the export of diesel and ATF, in line with softening international oil prices, according to an official order.
The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) has been cut to Rs 1,900 per tonne from Rs 2,100 per tonne, the order dated January 16, said. Crude oil pumped out of the ground and from below the seabed is refined and converted into fuel like petrol, diesel and aviation turbine fuel (ATF).
The government has also reduced the tax on export of diesel to Rs 5 per litre, from Rs 6.5 and the same on overseas shipments of ATF to Rs 3.5 a litre, from Rs 4.5 a litre. The new tax rates are effective from January 17. Windfall profit tax on domestically-produced crude oil is the second lowest since the new levy was introduced in July 2022.
The tax had fallen to Rs1,700 per tonne in the second fortnight of December 2022. The levy on the export of diesel now equals the lowest hit in the first half of August and October 2022 and the second half of December 2022. Tax rates were increased at the last fortnightly review on January 3, following a firming up of global oil prices. International oil prices have since then dropped, necessitating the reduction of a windfall tax.
India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies.
