Windfall tax on locally produced crude oil reduced
19 Aug 2022 13:04:45
New Delhi, Aug 19: The union government has reduced the windfall tax on the sale of locally produced crude oil to ₹13,000 per tonne. For the past two weeks, the sale of crude oil produced in India attracted an additional duty of ₹17,750 per tonne.
The Centre has also revised the cess on the export of aviation turbine fuel (ATF) to ₹2 per liter. For the past two weeks, ATF exports did not attract the cess.
The special additional excise duty on the export of diesel has been increased from ₹5 to ₹6 per liter, and including a cess, it would be ₹7 per liter. Export of petrol would continue without the levy of the windfall tax. The new rates are effective from 19 August. On July 1, the Centre imposed an export duty of ₹6 per liter on petrol and ATF and a ₹13 a liter duty on the export of diesel. A windfall tax of ₹23,250 per tonne was imposed on the sale of domestic crude. The taxes were first reviewed on 20 July, wherein the ₹6 per liter duty on petrol exports was scrapped and the tax on the export of diesel and jet fuel (ATF) was reduced to ₹11 and ₹4 respectively. The tax on domestically produced crude was also cut to ₹17,000 per tonne on 20 July. Revenue Secretary Tarun Bajaj had said after the imposition of the tax on 1 July that it would be reviewed every 15-days factoring in the foreign exchange rate and global crude prices, among other factors. Government first imposed windfall taxes on July 1 amid high profits incurred by oil and gas companies due to elevated energy prices on the back of the Russia-Ukraine conflict. Domestic producers sell crude to refiners at prices benchmarked on international prices. The bellwether Brent crude prices were largely at multi-year high levels from February till a month back.
Crude prices have eased of late and have fallen to 6-month low levels amid recession fears. At the time of writing the article, the October contract of Brent on the Intercontinental Exchange was $96.09 per barrel, higher by 2.61% from its previous close.