Windfall Tax: Government completely abolished windfall tax on crude oil, tax was imposed in July last year.

The government has completely abolished the windfall tax on crude oil. This decision of the government has become effective from Tuesday (April 4, 2023). Explain that before this decision of the government, windfall tax was being imposed on crude oil at the rate of Rs 3,500 ($ 42.56) per tonne. Apart from this, the government has also removed the Special Additional Export Duty (SAED) on ATF and Petrol. Currently, the SSED on diesel is 50 paise per litre.

When was windfall tax imposed?

India imposed a windfall tax on crude oil producers and tariffs on exports of gasoline, diesel and aviation fuel on July 1, 2022. During that time the government had taken this decision because private refiners wanted to make profit by selling it in foreign markets with strong margins instead of selling it domestically.

Petroleum products are extracted from beneath the land and seabed, refined and converted into fuels such as petrol, diesel and aviation turbine fuel (ATF). Explain that the tax rates are reviewed every fortnight on the basis of the average oil prices in two weeks.

Export duty was imposed on petrol and ATF at the rate of six rupees per liter

Reliance Industries Limited, which operates the world’s largest single-site oil refinery complex in Jamnagar, Gujarat. At the same time, Rosneft-backed Nayara Energy is the largest exporter of the fuel in the country. India first imposed windfall profits tax on July 1 last year. With this, it had joined the list of countries that tax super profits of energy companies. At that time, an export duty of Rs 6 per liter ($12 per barrel) was imposed on petrol and ATF and Rs 13 per liter ($26 per barrel) on diesel.

Export tax on petrol was abolished in the very first review and on ATF it was abolished on March 4. imposes tax on The duty on fuel exports is based on the gaps or margins that refiners earn on overseas shipments. This margin is mainly the difference between the international oil price and the cost.