Govt likely to cut windfall gain tax in third fortnightly review

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The central government is likely to cut windfall gain tax levy in a fortnight review, CNBC-TV18 reported on August 18. The export duty on diesel may also be reduced during the review meeting.

Notably, this will be the third fortnightly review of windfall gains tax. In the previous reviews, the export duties on petrol and aviation turbine fuel (ATF) were removed.

The Petroleum Ministry will likely recommend a cut in the taxes due to decreasing crude oil prices.

Also read: What is a windfall tax and why is it back in discussion?

The Centre in July eliminated a levy on gasoline exports and cut windfall taxes on other fuels less than three weeks after they were imposed; the windfall tax on diesel and aviation fuel shipments was reduced by Rs 2 per litre. The move had offered relief to top fuel exporter Reliance Industries and top crude explorer Oil & Natural Gas Corp (ONGC).

On July 1, the Government of India had slapped an export tax on petrol and diesel after some refineries made “phenomenal profits” shipping overseas at the cost of domestic supplies, and imposed a Rs 66,000 crore windfall tax on crude oil produced locally.

The Finance Ministry had said: “A Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel is effective from July 1.”

Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically, which at last year’s production level of close to 29 million tonnes translates into annual revenue of Rs 66,000 crore to the government.

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