The Central Government on Thursday reduced the windfall tax levied on domestically produced crude oil, as well as on the export of diesel and aviation turbine fuel (ATF).
Windfall tax on domestically produced crude oil has been reduced to Rs 4,350 per tonne from Rs 5,050 per tonne, while the tax on overseas shipment of ATF has been cut to Rs 1.50 per litre from Rs 6 a litre.
The government has also slashed tax on the export of diesel to Rs 2.50 per litre from Rs 7.50 per litre. Petrol continues to have zero windfall tax.
The cut has been made on account of rising international oil prices. The new rates come into effect from February 16, 2023, the Ministry of Finance stated.
Windfall tax is imposed by government on profits made by oil producers on any price they get above the rate of $75 per barrel. The Centre first levied windfall profit taxes on July 1, 2022. The government had levied a tax of Rs 6 per litre each on petrol and ATF, while on diesel, it was Rs 13 per litre.
The levy is reviewed every fortnight by the Government and is changed on the basis of international oil prices.
As per to top government officials, the seven-month-old windfall profit tax on domestically produced crude oil and fuel exports is expected to generate about Rs 25,000 crore in the current fiscal year, which ends on March 31.
“As of now, crude prices are again on the rise. So, for time being windfall tax will continue,” PTI quoted CBIC chairman Vivek Johri.
Separately, Revenue Secretary Sanjay Malhotra had stated that the budget had forecast the current fiscal year’s windfall tax collection at Rs 25,000 crore.
Johri had stated that it would be “impossible to anticipate how long the windfall taxes will last” because of how unstable the geopolitical environment remained.
(With agency inputs)
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