Windfall gains tax on domestic crude oil production cut to Rs 3,500 per tonne 

The government slashed the windfall gains tax on the domestic production of crude petroleum by Rs 900 per tonne from Rs 4,400 tonne to Rs 3,500 per tonne. The new rate will come into effect from Tuesday. 

The central government had last hiked the windfall tax on the production of crude petroleum by Rs 50 per tonne from Rs 4,350 per tonne to Rs 4,400 per tonne on March 4. Windfall tax is levied on companies and sectors that report sudden profits due to some unexpected reasons. 

India first imposed windfall gains tax on July 1 last year. At the time, export duties of Rs 6 per litre each were levied on petrol and ATF and Rs 13 per litre on diesel. Rs 23,250 per tonne windfall profit tax on domestic crude production was also levied. Windfall profit taxes are reviewed on a fortnightly basis by factoring in international oil prices. 

The government decided to impose a windfall tax as companies started increasing their exports for profit since the supply of Russian oil was affected internationally last year. Oil exploration and production companies reaped massive benefits due to this. 

Meanwhile, global oil prices were stable on Tuesday after falling on investor worries regarding the ongoing banking sector crisis. Brent crude futures for May settlement gained 5 cents and traded at $73.84 per barrel whereas US West Texas Intermediate (WTI) crude futures rose 9 cents to $67.73 per barrel, according to news agency Reuters.

(With inputs from agencies)

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