Windfall Tax: Government has reduced windfall tax on diesel, who will benefit?

Windfall Tax: The government has reduced windfall tax on domestically produced crude oil from Rs 10,500 per tonne to Rs 8,000 per tonne.

windfall profit tax

Image Credit source: PTI

Windfall Tax : In the sixth fortnight review, the central government has cut windfall tax on domestic crude oil and diesel. Along with this, the tax on export of jet fuel has been abolished. The government has reduced windfall tax on domestically produced crude oil from Rs 10,500 per tonne to Rs 8,000 per tonne. On the export of diesel, it was reduced from Rs 10 per liter to Rs 5 per liter.

Let us inform that earlier the government had reduced the windfall tax on crude oil exports from Rs 13,300 to Rs 10,500 per tonne. Along with this, the export duty applicable on diesel was reduced to Rs 5 per liter. Which was earlier increased from Rs 7 per liter to Rs 13.50 per liter.

ATF will not be taxed

The government has taken this step after the fall in international rates. At the same time, this tax on the export of ATF (Aviation Turbine Fuel) at the rate of Rs 5 per liter has been abolished. The government had on July 1 decided to impose windfall tax on domestically extracted crude oil. While duties were imposed on the export of petrol, diesel and aviation fuel, a Special Additional Customs Duty (SAED) was imposed on locally produced crude.

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Why was windfall tax imposed?

Windfall tax is levied on such companies or industries, which make immediate substantial gains in certain circumstances. Indian oil companies are a good example of this. International crude oil prices rose after Russia’s attack on Ukraine. Oil companies got a lot of benefit from this. Due to the Russo-Ukraine war, oil companies were reaping huge profits, so windfall tax has been imposed on them. Due to this huge amount is reaching the government exchequer. Due to which the government is earning good money.