In the last revision the Centre had reduced the windfall profit tax on domestically produced petrol to zero while it has halved the levy on the export of diesel to Rs 0.50 per litre.
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New Delhi: The government of India on Tuesday reimposed windfall tax on domestically produced crude oil at Rs 6,400 per tonne and scrapped export duty on diesel. The export duty exemption for petrol and aviation turbine fuel (ATF) will continue.
In the last revision the Centre had reduced the windfall profit tax on domestically produced petrol to zero while it has halved the levy on the export of diesel to Rs 0.50 per litre.
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The duty will be effective from 19 April 2023, according to a notification issued by the Central Board of Indirect Taxes and Customs.
In the last revision the government had cut the tax on the export of diesel to Rs 0.50 per litre from Rs 1. The latest revision in windfall tax comes in the backdrop of rise in oil prices following a surprise cut in production by OPEC plus.
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The tax rates are reviewed every fortnight by the government reviews to calibrate the tax mop-up.
WHAT IS WINDFALL TAX
Windfall tax was first imposed by the government after crude oil prices soared in the aftermath of the Russia-Ukraine war. The oil producers fetched huge profits then as a windfall gain — a sudden, unexpected spike in earnings, and the government started taxing those extra earnings.
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As per the officials, tax rate absorbs only a part of the extra profits that the companies earn in global markets during a period of high prices.
During a post-budget interview on 4 February 2023, Revenue Secretary Sanjay Malhotra had told Mint that the government estimates around Rs 25,000 crore of revenue receipts in the current fiscal from the windfall profit tax.
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Malhotra also said then that in the case of petrol, it has already been removed and the levy will apply to crude oil and products only if there is a windfall profit.
The export duty on aviation turbine fuel was scrapped during one of the previous previous revisions.
