Moneycontrol PRO
Upcoming Event : LeapToUnicorn - mentoring, networking and fundraising for startups. Register now

Government cuts windfall profit tax on local crude, diesel, lifts for jet fuel

At the sixth fortnightly review, the government reduced the tax on domestically produced crude oil to Rs 8,000 per tonne from Rs 10,500 per tonne

October 02, 2022 / 06:43 AM IST
Representative image

Representative image

The government has cut the windfall profit tax on locally produced crude oil and diesel, in line with a fall in international rates, and scrapped the levy on the export of jet fuel with effect from October 2.

At the sixth fortnightly review, the government reduced the tax on domestically produced crude oil to Rs 8,000 per tonne from Rs 10,500 per tonne.

The levy on the export of diesel was reduced to Rs 5 per litre from Rs 10 per litre.

The tax at the rate of Rs 5 a litre on Aviation Turbine Fuel (ATF) exports was scrapped with effect from October 2, according to a finance ministry notification issued late Saturday night.

The reduction in the tax rates follows the easing of crude oil prices in international markets.

Petrol & Diesel Rates Dec 01, 2022

Thursday, 01st December, 2022

Petrol Rate in Mumbai Dec 01, 2022

  • Current Petrol Price Per Litre
    106

Thursday, 01st December, 2022

Diesel Rate in Mumbai Dec 01, 2022

  • Current Petrol Price Per Litre
    94
Show

While private refiners Reliance Industries Limited and Rosneft-based Nayara Energy are the principal exporters of fuels like diesel and ATF, the windfall levy on domestic crude targets producers like state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta Limited.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. But international oil prices have cooled since then, eroding the profit margins of both oil producers and refiners.

Export duties of Rs 6 per litre ($12 per barrel) were levied on petrol and ATF and Rs 13 a litre ($26 a barrel) on diesel. A Rs 23,250 per tonne ($40 per barrel) windfall profit tax on domestic crude production was also levied.

The duties were partially adjusted in the previous five rounds on July 20, August 2, August 19, September 1 and September 16 and were removed for petrol.
PTI
first published: Oct 2, 2022 06:40 am