Govt reviews windfall gains tax, cuts cess on crude; OMC trade mixed

Representative image (Source: Reuters)

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In its third fortnightly review of windfall gains tax, the Government of India on August 18 cut the cess on crude oil and reduced it to Rs 13,000/tonne from Rs 17,750 per tonne.

According to a circular issued by the Centre, the export duty on aviation turbine fuel (ATF) was hiked to Rs 2 per litre from nil while the export duty on diesel was hiked by two rupees to Rs 7 per litre from Rs 5 per litre. The changes will come into force on August 19, 2022.

Oil marketing companies including ONGC, Oil India, Indian Oil and Reliance traded mixed on August 19, a day after government announced a  reduction of cess on crude oil during its fortnightly review of windfall gains tax.

At around 11 am, shares of Indian Oil traded 0.48 per cent lower at Rs 72.30 apiece on the BSE. Oil India was in the green, trading 0.13 per cent higher at Rs 191.90 apiece on the BSE.

Reliance Industries traded 0.31 per cent lower at Rs 2,652.50 apiece on the BSE, while shares of ONGC were in the green, trading 0.89 per cent higher at Rs 136.70 apiece on the BSE.

In the previous review meets, the export duties on petrol and aviation turbine fuel (ATF) were removed by the government.

The Centre had a month ago 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.

On July 1, the Union Ministry of Finance 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.

With this, India had joined a select league of nations globally that have taxed windfall gains accruing to oil companies from soaring energy prices.

Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.