Government Gives Your Pocket Some Rest By Slashing Windfall Tax: Know Everything About It

Government Gives Your Pocket Some Rest By Slashing Windfall Tax: Know Everything About It

India has lowered the windfall tax on petroleum crude from Rs 8,400 to Rs 5,700 (USD 68.34) per metric ton.

Vikrant DurgaleUpdated: Thursday, May 16, 2024, 10:57 AM IST
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India's Petroleum Products Demand To Increase /Representative image | Photo credit: Pixabay

India has lowered the windfall tax on petroleum crude from Rs 8,400 to Rs 5,700 (USD 68.34) per metric ton, as per a notification released on Wednesday,with effect from May 16. The tax on diesel and aviation turbine fuel stays at zero and is reviewed every two weeks.

The windfall tax on petroleum crude was reduced by the government on May 1 from Rs 9,600 to Rs 8,400 per metric ton.

Windfall tax explained

On July 1, 2022, India implemented the special additional excise duty (windfall tax) for the first time, joining an increasing number of countries that tax energy companies' supernormal profits.

A windfall tax is an additional tax that the government imposes on particular industries that see above-average and unexpected profits. 'Windfall' describes, as its name implies, a sudden and sharp rise in profits. However, the term tax suggests that there is a charge placed on this sharp increase in income.

The conflict in Russia and Ukraine is to blame for the sharp increase in crude oil prices. As a result, during the financial year 2022, the oil companies in India achieved unprecedented profits, setting a record for net gains. ONGC, GAIL, and Oil India are some of the major revenue collectors.

Nil Export Duty Remained

The government has decided to keep the export duty on petrol, diesel, and aviation turbine fuel (ATF) at zero in addition to lowering the windfall gains tax. This strategic choice aims to maintain these vital energy products' competitiveness in the export market.

Fuel Prices Across Major Cities

According to reports, petrol prices stood at Rs 99.84 in Bangalore, Rs 94.24 in Chandigarh, Rs 100.75 in Chennai, Rs 103.94 in Kolkata, Rs 104.21 in Mumbai City, and Rs 94.72 in New Delhi.

Meanwhile, diesel prices for Bangalore are at Rs 85.93, Chandigarh at Rs 82.40, Chennai at Rs 92.35, Kolkata at Rs 90.76, Mumbai City at Rs 92.15, and New Delhi at Rs 87.62.

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