Windfall Tax: In a major shock to oil companies, the central government on Friday decided to increase the windfall tax on domestic crude oil production. Now it has increased from Rs 10,000 per tonne to Rs 12,000 per tonne. The new rates are effective from 30 September 2023 i.e. Saturday.
Along with this, the government has decided to reduce the windfall tax on diesel export from Rs 5.50 to Rs 5 per litre. Apart from this, the windfall tax on Aviation Turbine Fuel (ATF) has been reduced from Rs 3.50 to Rs 2.50. The finance ministry has said that no windfall tax will be levied on petrol.
The windfall tax has been increased before.
Earlier, the central government had reviewed the windfall tax on September 15, 2023. In this, the government had increased the windfall tax on crude oil from Rs 6,700 per tonne to Rs 10,000 per tonne. Also, the export duty on diesel has been reduced from Rs 6 to Rs 5.50. Tax on aviation turbine fuel reduced from Rs 4 per liter to Rs 3.50 per litre.
What is a windfall tax?
For the first time on July 1, 2022, the central government imposed an export duty of Rs 6 per liter on petrol and ATF and Rs 13 per liter on the export of diesel. Along with this, it was decided to impose a windfall tax of Rs 23,250 per tonne on the sale of domestic crude oil. It should be noted that the government imposes a windfall tax on the profits of oil companies. For this reason oil companies avoid selling oil abroad instead of India to earn more profit. The government generally reviews the windfall tax every 15 days.
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