After the rise in crude oil prices, the government increased the windfall gain tax, which applies only to crude oil and diesel.

Windfall Gain Tax: After the increase in crude oil prices, the government has decided to increase the windfall gain tax on domestic crude oil. This increase will be considered effective from February 16, 2024. The government has decided to increase the special additional excise duty on crude oil from Rs 3200 per tonne to Rs 3300 per tonne. Export tax on diesel has been increased. However, there is no change in the special additional excise duty on petrol and ATF.

According to a notification issued by the government, from Friday, February 16, state-owned oil companies like ONGC will have to pay a windfall gain tax in the form of a special additional excise duty of Rs 3,300 per tonne on locally produced crude oil. The government has taken this decision after the increase in crude oil prices in recent days. In the same month, the government increased the special additional excise duty on domestic crude oil production from Rs 1,700 per tonne to Rs 3,200 per tonne.

After crude oil prices exceed $75 per barrel, the government imposes a windfall gain tax in the form of a special additional excise duty on crude oil production in the country so that the government can collect more tax on the excess revenue from exports. The special additional excise duty on diesel has been increased from zero to Rs 1.50 per litre. The government levies this tax on exported diesel. Special additional excise duty on petrol and aviation fuel will remain zero for now.

The central government had decided to impose windfall tax on petroleum products from July 1, 2022. Windfall gain tax is collected in the form of special additional excise duty on locally produced crude oil, petrol, diesel and ATF. Whenever the price of crude oil increases, the government increases the tax on the fall-gain.

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