India reduces Windfall Tax
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New Delhi, Sept 17: The Indian government today reduced windfall profit tax on locally produced crude oil, and on the export of diesel and aviation turbine fuel, amid a decline in global crude oil prices.
New Delhi has cut cess on crude to Rs 10,500 per tonne, according to a notification from the Ministry of Finance.
India has also lowered the windfall tax on diesel to Rs 10 per liter and on ATF to Rs 5 per liter. On September 1, the government increased the windfall tax on domestic crude oil to Rs 13,300 per tonne from earlier Rs 13,000 per tonne. It had also revised the cess on the export of ATF to Rs 9 per liter from Rs 2 per liter and increased excise duty on the export of diesel to Rs 12 per liter from Rs 6 per liter. Total windfall tax on diesel includes Rs 1.5 per liter road infra cess. Overseas shipment of petrol will continue to be exempted from windfall tax. This is the fifth revision of the windfall tax since its implementation on July 1. The new rates will be effective from tomorrow. The basket of crude oil that New Delhi buys has averaged $92.67 per barrel this month, falling from $97.40 in August. The government has maintained that the levy was introduced in view of the windfall gains made by the domestic crude producers and refiners due to high global crude and product prices. The government had said it will review the windfall levy on locally produced crude oil every fortnight. The levy was expected to compensate for the reduction in the excise duty on petrol and diesel to provide relief to consumers. But the reduction in the windfall cess from the initial levels is expected to reduce the realization for the government.
Private refiners Reliance Industries Ltd and Rosneft-based Nayara Energy are the primary exporters of fuels like diesel and ATF. The windfall levy on domestic crude aims for producers such as state-run Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd.