The government has updated the recently enacted windfall tax to apply to aviation, crude oil, and crude oil (ATF)
windfall Tax on Diesel, ATF Exports Increased: The government has updated the recently enacted windfall tax applied on aviation turbine fuel, diesel, and crude oil (ATF). In accordance with a government announcement made on Thursday, the tax on domestic crude oil has been lowered from Rs 17,750 per tonne to Rs 13,000 per tonne while the export duty on jet fuel has been increased from zero to Rs 2 per litre. Additionally, the excise tax on diesel exports has increased from Rs. 5 per litre to Rs. 7 per litre. Petrol exports continue to be exempt from excise taxes.
Understand Windfall Tax.
A one-time tax imposed by the government on a business is known as a windfall tax. The financial gain that results from an event for which a corporation is not at fault is known as windfall earnings.
Governments often impose a one-time windfall tax on such income in addition to the regular tax rates.
India enacted windfall taxes on July 1, joining a growing list of countries that tax energy corporations’ higher-than-average profits. However, since then, global oil prices have fallen, reducing profit margins for both oil producers and refiners.
On July 1, export taxes of Rs. 6 per litre ($12 per barrel) were imposed on gasoline and ATF and Rs. 13 per litre ($26 per barrel) on diesel. On domestic crude output, a windfall profit tax of Rs 23,250 per tonne ($40 per barrel) was also imposed.
When the windfall tax was first implemented, the government said that its goal was to stabilise domestic supplies since refiners preferred to export rather than fill local demand.
The administration abolished the export taxes on gasoline and aviation turbine fuel (ATF) in the previous review meetings.
Less than three weeks after they were implemented, the Centre slashed windfall taxes on other fuels and removed a duty on gasoline exports. The windfall tax on shipments of diesel and aviation fuel was also reduced by Rs 2 per litre.
According to the government, the levy was instituted in response to the windfall profits realised by domestic crude producers and refiners as a result of high global crude and product prices.
The fee was supposed to relieve consumers by making up for the decrease in the excise duty on gasoline and diesel. However, it is anticipated that the government’s revenue will decrease due to the windfall cess’s decline from its initial levels.
