Indian govt slashes windfall tax on local crude oil and gas

In the fortnightly revision of windfall profit tax, the government cut the rate on export of diesel to Rs 8 per litre from Rs 10.5 per litre.

PTIUpdated: Thursday, December 01, 2022, 10:28 PM IST
article-image
PTI

The government on Thursday slashed to less than half the windfall profit tax on domestically produced crude oil and also reduced the levy on diesel. The revised tax rates become effective from December 2, 2022.

The tax on crude oil produced by firms such as state-owned Oil and Natural Gas Corporation (ONGC) has been reduced to Rs 4,900 per tonne from the existing Rs 10,200 per tonne, as per a government notification issued on Thursday.

In the fortnightly revision of windfall profit tax, the government cut the rate on export of diesel to Rs 8 per litre from Rs 10.5 per litre. The levy includes Rs 1.5 per litre as road infrastructure cess.

The special additional excise duty on petrol continues to remain nil and that on aviation fuel ATF at Rs 5 a litre.

When the levy was first introduced, a windfall tax on export of petrol alongside diesel and ATF (Aviation Turbine Fuel) too was levied. But the tax on petrol was scrapped in subsequent fortnightly reviews.

While windfall profit tax is calculated by taking away any price that producers are getting above a threshold, the levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference of international oil price realised and the cost.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were levied on petrol and ATF and Rs 13 a litre (USD 26 a barrel) on diesel. A Rs 23,250 per tonne (USD 40 per barrel) windfall profit tax on domestic crude production was also levied.

(If you have a story in and around Mumbai, you have our ears, be a citizen journalist and send us your story here. )

(To receive our E-paper on WhatsApp daily, please click here.  To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Ahead of Market: Here are factors to consider and stocks to look for

Ahead of Market: Here are factors to consider and stocks to look for

London Science Museum to continue association with Adani Group: Report

London Science Museum to continue association with Adani Group: Report

6 common money fears and ways to conquer them

6 common money fears and ways to conquer them

Gautam Adani's half wealth goes in a flash

Gautam Adani's half wealth goes in a flash

Interpol extends its jurisdiction into the virtual world, will investigate crimes in metaverse

Interpol extends its jurisdiction into the virtual world, will investigate crimes in metaverse