The windfall tax on domestically produced crude oil in India was reduced from 6,400 per tonne to 4,100 per tonne. There will still be no export taxes on petrol, diesel and jet fuel. The Central Board of Indirect Taxes and Customs said that the tax would go into force on May 2.
In the last revision, the government eliminated the export tariff on fuel and increased the windfall profit tax on locally produced oil from zero to $6,400 per tonne. The most recent modification
results from a drop in oil prices. Every two weeks, the tax rates are adjusted based on the two-week average of oil prices. India implemented the windfall profit tax on July 1, 2022, joining an increasing number of countries that tax energy businesses' higher-than-average profits. While taxes were imposed on the export of petrol, diesel and jet fuel (ATF), local crude oil production was subject to a Special Additional Excise Duty (SAED). Then, New Delhi imposed export taxes on petrol and ATF of Rs. 6 per litre and on diesel of Rs. 13 per litre.
The calculation of the windfall profit tax involves deducting any price that producers receive that is more than the threshold. The fee was supposed to relieve customers by making up for the decrease in the excise duty on petrol and diesel. However, it is anticipated that the government's revenue will decrease due to the windfall cess's reduction from its initial levels.
The main exporters of fuels including diesel and ATF are Rosneft-based Nayara Energy and private refiners Reliance Industries Ltd. Producers like the government-run Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd. are targeted by the windfall charge on domestic crude.
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