Windfall tax or the special additional excise duty (SAED) on crude petroleum exports has been slashed to Rs 9,500 per tonne from Rs 11,000 at present, as per a government notification issued on November 1.
The SAED on aviation turbine fuel (ATF) has been increased from Rs 3.50 to Rs 5 per litre; and on diesel, it has been hiked from Rs 12 to Rs 13 per litre. The duty on diesel exports includes the RIC charge of Rs 1.50 per litre.
Windfall tax was introduced by the government on July 1 to charge the industry for the large profit it has been earning through the sale of refined crude in the international market. Its quantum is reviewed at every fortnight.
On October 16, at the seventh fortnightly review, the Centre had raised the tax on domestically produced crude from Rs 8,000 per tonne to Rs 11,000. It had also increased the SAED on ATF exports from nil to Rs 3.5 per litre, and on diesel from Rs 5 to Rs 10.5 per litre (excluding RIC).
Also Read | MC Explains: Windfall tax: Everything you need to know, and what next
Producers, including state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta-controlled Cairn, are impacted by the windfall tax on domestic crude.
ONGC had urged the government to withdraw profit tax on domestically produced crude oil and instead use the dividend route to tap into the bumper earnings resulting from a surge in global energy prices, news agency PTI had reported earlier.
However, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri had said that windfall tax was under the purview of the finance ministry and the ministry would continue to review it at every fortnight.
With elections in some states due in the second half of FY23, IIFL Securities said in a report that it needs to be seen how the government deals with issues like reviewing windfall tax on oil and exports.
Earlier in July, when the government had first imposed windfall taxes, Revenue Secretary Tarun Bajaj said India will only withdraw its windfall tax for oil producers and refiners if global prices of crude fall as much as $40 a barrel from present levels.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
