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After being in existence for almost over two years, the top government has decided to discontinue the windfall gains tax levy. Sources told CNBC-TV18 that the top government, including the Prime Minister’s office, took a detailed review of the levy with the Revenue Department and the Petroleum Ministry, post which it decided to “discontinue with the tax.”
Sources say, “some of the reasons behind the decision of discontinuation of the tax include the fact that of late the levy was not yielding much revenue. The industry, since its existence, was unhappy with the tax. The levy was not making the industry enhance production levels, thus the PMO decided to discontinue the tax.”
“Of late, average crude prices had become comfortable because of which most of the segments of the tax, be it the levy on ATF, petrol, or diesel, were continuing as a nil tax, thus the government did not want to continue with a tax which was not garnering much revenue,” sources added.
On being asked how soon the discontinuation announcement can be expected, sources said, “the petroleum ministry and revenue department have now been asked to work out the contours and issue a notification for the formal closure of the scheme.”
“The closure could be announced as soon as early December or by the end of December,” sources indicated. However, sources also added that it will depend on formal paperwork and assessment, which has already started between the two ministries—that is, petroleum and the revenue department.
The windfall gains tax was levied from July 1, 2022, to help the government tide over the aftereffects of COVID-19 and garner more revenue from the industry.
Sources say, “some of the reasons behind the decision of discontinuation of the tax include the fact that of late the levy was not yielding much revenue. The industry, since its existence, was unhappy with the tax. The levy was not making the industry enhance production levels, thus the PMO decided to discontinue the tax.”
“Of late, average crude prices had become comfortable because of which most of the segments of the tax, be it the levy on ATF, petrol, or diesel, were continuing as a nil tax, thus the government did not want to continue with a tax which was not garnering much revenue,” sources added.
On being asked how soon the discontinuation announcement can be expected, sources said, “the petroleum ministry and revenue department have now been asked to work out the contours and issue a notification for the formal closure of the scheme.”
“The closure could be announced as soon as early December or by the end of December,” sources indicated. However, sources also added that it will depend on formal paperwork and assessment, which has already started between the two ministries—that is, petroleum and the revenue department.
The windfall gains tax was levied from July 1, 2022, to help the government tide over the aftereffects of COVID-19 and garner more revenue from the industry.
(Edited by : Ajay Vaishnav)
First Published: Nov 18, 2024 9:19 PM IST
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