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Source: Nanfang Daily Online Edition     time: 2022-08-17 09:41:22

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  Windfall tax on fuel export slashed; raised on domestic crude oil

Fuel export, crude oil
Image Source : PTI Govt cuts windfall tax on fuel export, raises levy on domestic crude oil

Highlights

  • The tax on export of diesel was cut to Rs 5 per litre from Rs 11
  • The tax on jet fuel (ATF) was scrapped
  • Export of petrol will continue to attract nil tax

Windfall tax on diesel and ATF was cut on Tuesday, while the government raised the duty on domestically produced crude oil. This was done in line with softening international petroleum product prices. 

According to an official notification, the tax on the export of diesel was cut to Rs 5 per litre from Rs 11, while the tax on jet fuel (ATF) was scrapped.

Export of petrol will continue to attract nil tax.

The tax on domestically produced crude oil was hiked to Rs 17,750 per tonne from Rs 17,000, a move that will hit producers like ONGC and Vedanta Ltd.

India first imposed windfall taxes on July 1, joining a growing number of nations that taxes super normal profits of energy companies. But international oil prices have cooled since then, eroding profit margins at both oil producers and refiners.

On July 1, export duties of Rs 6 per litre (USD 12 per barrel) were levied on petrol and ATF and a Rs 13 a litre tax on the export of diesel (USD 26 a barrel). The Rs 23,250 per tonne windfall tax on domestic crude production (USD 40 per barrel) was also levied.

Thereafter, in the first fortnightly review on July 20, the Rs 6 a litre export duty on petrol was scrapped, the tax on the export of diesel and jet fuel (ATF) was cut by Rs 2 per litre each to Rs 11 and Rs 4 respectively. 

The tax on domestically produced crude was also cut to Rs 17,000 per tonne.

Now, the export tax on diesel and ATF has been cut following a drop in refinery cracks or margins. But the levy on domestically produced crude oil has been raised in line with a marginal increase in international crude prices.

(With inputs from PTI)

Also Read | Nobody is in denial about price rise, Indian economy definitely much better, says Sitharaman

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