On December 16, the government lowered the windfall profit tax on locally produced crude oil as well as the charge on diesel. The new tax rates are in effect starting on December 16, 2022.
According to a government statement, the tax on crude oil produced by companies like the state-owned Oil and Natural Gas Corporation (ONGC) has been decreased from the previous Rs 4,900 per tonne to Rs 1,700 per tonne.
The government reduced the tariff on fuel export from Rs 8 per litre to Rs 5 per litre as part of the fortnightly modification of the windfall profit tax. The tax includes a road infrastructure cess of Rs. 1.5 per gallon.
Since its implementation, the government has updated the windfall tax approximately every two weeks. The tax on oil produced in domestic fields has decreased by nearly 65% since the most recent modification.
The calculation of the windfall profit tax involves deducting any price that producers receive that is more than the threshold.
On July 1, India introduced its first windfall profit tax, joining an increasing number of countries that tax energy companies' higher-than-average profits. The export taxes at the time were Rs 6 per litre (USD 12 per barrel) for gasoline and ATF and Rs 13 per litre (USD 26 per barrel) for diesel. Additionally, a windfall profit tax of Rs 23,250 per tonne (USD 40 per barrel) was imposed on domestic crude production.
(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.)