Govt hikes windfall tax on petroleum crude w.e.f. 15th Aug. 2023: The government has issued a notification vide notification no. No. 26/2023-Central Excise (G.S.R. 600(E).) dated 15.08.2023 and has hiked the windfall profit tax on crude oil produced in the country and on export of diesel, while bringing back the levy on overseas shipments of ATF.
The government has increased the windfall tax on petroleum crude to ₹7,100 per tonne from ₹4,250 per tonne with effect from tomorrow, 15 August according to a government notification.
Besides, the special additional excise duty (SAED) on the export of diesel has been increased to ₹5.50 per litre from ₹1 per litre. A duty of ₹2 per litre will be imposed on the export of jet fuel or ATF with effect from August 15.
India first imposed windfall profit taxes on July 1 last year, joining a growing number of nations that tax supernormal profits of energy companies. At that time, export duties of ₹6 per litre ($12 per barrel) each were levied on petrol and ATF and ₹13 a litre ($26 a barrel) on diesel.
A windfall tax is levied on domestic crude oil if rates of the global benchmark rise above $75 per barrel. Export of diesel, ATF and petrol attract the levy if product cracks (or margins) rise above $20 per barrel.
The windfall tax on petrol will remain nil. SAED on petrol will continue to be zero. India first imposed windfall profit taxes on July 1, 2022.
The purpose of a windfall tax is to capture a portion of these excessive profits for the government’s revenue and to prevent the beneficiaries from unduly benefiting from the windfall gains.
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