The Centre hikes the windfall tax on Domestic crude oil, Jet fuel, and Diesel exports.
29 Oct 2022
The government has hiked the tax on domestically produced crude oil to Rs 11,000 per tonne from Rs 8,000 per tonne.
The Centre has increased the Special Additional Excise Duty, commonly known as windfall tax, on domestically produced crude oil and the export of aviation turbine fuel and diesel following the recent decision by the Organization of the Petroleum Exporting Countries and allies (OPEC+) to cut their oil production. From October 16, the new rates will be effective.
OPEC+'s move has pulled global prices, showing an average price of over $90 per barrel.
According to the government notification on Saturday, it has hiked the tax on domestically produced crude oil to Rs 11,000 per tonne from Rs 8,000 per tonne.
It has also increased the tax on the export of Aviation Turbine Fuel to Rs 3.50 per litre from nil.
Like that the windfall tax on the export of diesel has been raised from Rs 5 per litre to Rs 10.50 per litre, taking the total excise duty on the export of diesel to Rs 12 per litre (including Rs 1.50 per litre regulated investment company included).
The windfall tax is a special tax imposed by a government on a company or industry when it benefits from something but is not responsible for the financial gain that ensues. It is called windfall profits.
The government cut the windfall profit tax on domestic crude and diesel on september 17, following a decline in international crude prices, and also discontinued the charge on the export of jet fuel from October 2.
The authority reduced the tax on domestically-produced crude oil to Rs 8,000 per tonne from Rs 10,500 per tonne at the sixth fortnightly review,
The charge on the export of diesel was reduced to Rs 5 per litre from Rs 10 per litre. The tax at the rate of Rs 5 a litre on jet fuel exports was abandoned on October 2.
Union Finance Minister Nirmala Sitharaman was aware that the uncertain geopolitical environment could trigger fresh supply concerns in the winter for critical commodities such as crude and natural gas on Friday.