Centre cuts windfall tax on domestic crude oil to Rs3,500 per tonne
1 min read . Updated: 21 Mar 2023, 01:22 AM IST
PremiumThe export duty on diesel has been increased to Re 1 per litre from ₹0.50
NEW DELHI : The union ministry of finance on Monday reduced the windfall tax on the locally-produced crude oil to ₹3,500 per tonne.
Over the past fortnight, the windfall tax stood at ₹4,400 per tonne.
The export duty on diesel has been increased to Re 1 per litre from ₹0.50. The taxes are reviewed every fortnight. The revised tax would be applicable from March 21.
Crude oil pumped out of the ground and from below the seabed is refined and converted into fuels such as petrol, diesel and ATF.
The windfall profit tax was imposed last year after crude oil prices soared in the aftermath of the Russia-Ukraine war, fetching large profits for oil producers. The government reviews the tax rates every fortnight to calibrate the tax mop-up.
According to officials, the tax rate absorbs only a part of the extra profits that the companies earn in global markets during a period of high prices.
Revenue secretary Sanjay Malhotra had told Mint in a post-budget interview on 4 February that the government estimates around ₹25,000 crore of revenue receipts in the current fiscal from the windfall profit tax.
Malhotra also said then that in the case of petrol, it has already been removed and the levy will apply to crude oil and products only if there is a windfall profit.
During the previous revision, Centre had scrapped the duty on export of aviation turbine fuel.
The reduction in the windfall tax on crude oil comes on the back of the recent ease in global crude oil prices. The May contract of Brent on the Intercontinental Exchange is at $72.67 per barrel, lower by 0.41% from its previous close. The April contract of West Texas Intermediate on the NYMEX fell 0.42% to $66.46 per barrel.