Govt likely to revise windfall tax on domestic oil refiners soon: Report

The central government is likely to revise windfall gain tax on domestic oil refiners soon, CNBC-TV18 reported on September 29 citing sources.

The development comes days after government reduced windfall tax on locally produced crude oil to Rs 10,500 from Rs 13,000/tonne after its fifth fortnightly review, according to a circular issued by Ministry of Finance on September 16. Additionally, it has also reduced tax export of diesel and ATF.

The sources added that there can be further cut in cess on crude oil, export duties on diesel and ATF.

The Petroleum Ministry has submitted the data of price movement of global crude oil prices over the past fortnight to revenue department pitching for a cut, the sources said.

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

On July 1, export duties of Rs 6 per litre ($12 per barrel) were levied on petrol and ATF and a Rs 13 a litre tax on export of diesel ($26 a barrel). The Rs 23,250 per tonne windfall tax on domestic crude production ($40 per barrel) was also levied.

The duties were partially adjusted in the previous four rounds on July 20, August 2, August 19, September 1 and September 16, and were removed for petrol.